The cash flow statement, on the other hand, deals only in what cash is actually on hand, not on paper profits. Therefore, dividing dividends by free cash flow (net cash from operations, less capital expenditures) will give a more realistic look at payout ratios than dividing dividends by net income.
Here is a table of telecoms with yield, payout and the free cashflow payout:
Company | Dividend Yield (Projected) | Payout Ratio or Percentage of Earnings Used to Pay Dividends | Percentage of Free Cash Flow Used to Pay Dividends |
(TTM) | (TTM) | ||
Frontier Communications | 10.70% | 461% | 82% |
Windstream (NYSE:WIN ) | 7.90% | 180% | 78% |
Consolidated Communications(Nasdaq: CNSL ) | 8.50% | 147% | 58% |
CenturyLink (NYSE:CTL ) | 8.40% | 143% | 58% |
Ntelos (Nasdaq:NTLS ) | 6.20% | 109% | 74% |
Verizon | 5.60% | 87% | 47% |
AT&T (NYSE: T ) | 6.10% | 50% | 71% |
Related Stock Ticker:
FTR, CNSL, CTL, NTLS, VZ, T
Source: Fool.com