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ShinesRooms Analytical Scan on AT&T and Windstream: Telecom Companies Focus on Infrastructure Upgrades

Thursday, 07 February 2013 08:00 AM

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The ShinesRooms.com Provides Stock Research on AT&T Inc. and Windstream Corporation

New York City, New York -- Telecom sector has lately been going through a quiet period, but things seem to be picking up this year. Major companies like AT&T Inc. are going ahead with its 4G expansion plans. The company also reported improved sales for its subsidized phones. Rural telecom companies, on the other hand, are still struggling with declining trend of traditional telephony. Windstream Corporation is looking to neutralize the impact by expanding its new offerings like broadband services. The stock prices are expected to respond positively to these new steps.

Access our free reports on AT&T Inc. (NYSE: T) and Windstream Corporation (NASDAQ: WIN). Traders can also connect to our Wall Street Trading Floor where our research desk and market pros are standing between 8:50 am to 4:15 pm ET at

http://www.ShinesRooms.com/T020713.pdf  

http://www.ShinesRooms.com/WIN020713.pdf    

Windstream Corporation stock lost 20 percent of its value in the past 12 months. However, it sweetened the deal with 10.13 percent dividend yield. The company is operational in rural segment and despite overall lukewarm scenario in the segment, it managed to increase its revenue in the fiscal third quarter of the year. Windstream is also attracting insider interest as its CEO Jefferey R. Gardner bought $239k worth of stock at the average price of $8.77 apiece. Insider buying is a positive sign for investors.

Windstream is expected to keep up its dividend payments as the company is growing organically as well as through acquisitions. It acquired Paetec in 2011 and the deal helped the company in generating revenue and reducing costs. At the very same time, the investors should remain cautious as the company pays out a large chunk of its free cash flows as dividends and thus may not be able to increase the dividend substantially in the future. On the plus side, the company has attracted interest from billionaire investor Ken Griffin of Citadel Investments. Windstream is also successfully augmenting its broadband and business services segments, which will help it to withstand stagnating traditional telecom business.

AT&T reported improved quarterly results as it managed to contain its losses. The company is focusing on boosting its 4G offerings as it cut its quarterly loss by 42 percent to $3.86 billion. After its T-Mobile debacle in 2011, the company now targets to beat its rivals by investing in LTE infrastructure. For this purpose, it made spectrum purchase from Horizon Wi-Com and Comcast. AT&T would need to make massive capital expenditure for this purpose, which may put temporary strain on its finances. Following the industry wide trend, AT&T is losing its wireline customers and it needs to neutralize the negative impact by ramping up other services such as broadband.

AT&T is an attractive investment option as the stock increased 18 percent in last one year and also provided over 5.08 percent dividend yield. At the very same time, AT&T has aggressive share repurchase plan, making it an even better investment deal. Since, the company generates healthy free cash flows, its dividend payment is expected to remain promising. It has been increasing its payouts from last 29 years and is well positioned to maintain the track record. The stock has good upside as the company continues to invest in upgrading its infrastructure, which eventually will help the company to maintain its leadership position.

 

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