S & safety stock dividend is the highest rate of P 500 index of earnings?

Investors need to be wary of things that seem too good to be true. Dividend stocks have yields of 8.6%, for example. There must be a catch, is not it?

Not necessarily, at least in the case of Internet century (symbol CTL, $ 25.11) to. Regional telecom company S & P 500 index yield the highest dividend stocks. In 8.8% of the yield of the century Internet stock looks like a dream income investors in this era of low interest rates. (Price and yield on the 10 May.)

When faced with such a high yield, investors should question whether the dividend is sustainable. After all, the stock dividend yields rising stock prices. Perhaps, high yield, because the stock market is in free fall. Perhaps Ť his company in trouble, they will have to cut or suspend dividend to weather the storm.

In the case of the Internet century, however, continue to appear dividend income investors is a reliable choice. The most critical is that the telecommunications company has more than enough surplus cash to pay dividends to produce more. Once the pending completion of the acquisition, Century Internet should have more cash into dividends.

The company 3 Communications and Level (LVLT), telecommunications and Internet service providers merge process. In a recent investment conference Sohn, hedge fund managers Corvex Management Keith Meister says, Century Internet and Level 3 will combine to create a business-oriented telecommunications services giant. Accordin g to Mestre, increase sales, and after the merger will boost the dividend from long distance interconnection century and stock prices to increase profits.

UBS analysts, who estimated that the stock “buy”, agreed, applauded the deal because it will increase revenue, reduce costs, resulting in an increase of free cash flow. These are cash profit after capital expenditures. “We believe the proposed acquisition of Level 3 improves the company’s fundamental outlook,” UBS analyst 巴特亚列夫 he said in a research note.

Cash flow Century Internet will be further enhanced, because the level of 3 books existing losses will allow the company to pay less tax, analysts said. Put it together, UBS expects the financial strain on the Internet century of decline, dividend accommodation putsIn the former “comfort can” level through at least 2021

Internet century has sufficient cash to pay dividends, agreed to merge. Once it off in the third quarter, the telecommunications company will have more. This should be music to any dividend investor’s ears, because what free cash flow to support the dividend.

What happens in the next few centuries Internet stock price is another matter entirely. If this continues, chaos, might outweigh any benefit from the lofty dividend, but at least investors can sleep at night, talking about their sources of income century Internet.