Keep holding these two spinoffs

Article Excerpt

Most Windstream and Frontier Communications investors probably received their shares as special dividends. While these firms’prospects aren’t as bright as bigger companies we recommend, like AT&T and Verizon, they are still worth holding for their steady dividends. WINDSTREAM CORP. $9.69 (Nasdaq symbol WIN; Income Portfolio, Utilities sector; Shares outstanding: 588.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 10.3%; TSINetwork Rating: Average; www.windstream.com) provides telephone and other communication services to 4.2 million clients, mainly in rural areas. In 2006, Alltel merged its telephone business with Valor Communications, which then changed its name to Windstream. Alltel investors received 1.0339267 Windstream shares for each share they held. In November 2011, Windstream acquired PAETEC Holding Corp., which sells telecommunication services to businesses in 46 states. Windstream issued $842 million in stock to PAETEC shareholders. It also assumed $1.6 billion of PAETEC’s debt. As a result of the purchase, Windstream now gets 69% of its sales from business clients and high-speed Internet…