AUSWR
The Association of U S West Retirees
 

 

 

Qwest to reinstate dividend, ending a six-year absence
By Jeff Smith
Rocky Mountain News
Friday, December 14, 2007

Qwest Communications is resuming a shareholder dividend after a six-year absence, a move welcomed by retirees and analysts.

The quarterly dividend will be 8 cents a share, representing a more than 4.5 percent annual yield based on Qwest's closing stock price of $6.96 Thursday.

That's comparable with the dividend yields of AT&T and Verizon.

"The company is in a position once again to fulfill its longstanding commitment to reward its stockholders," Qwest CEO Ed Mueller said in a statement Thursday.

Nelson Phelps, executive director of the Association of U S West Retirees, said he thinks retirees will be very pleased.

"Many bought the stock because they were looking for a return that could be guaranteed, and it was a real shock when (former CEO Joe) Nacchio cut that," Phelps said.

He predicted the dividend could attract new investors.

Predecessor U S West was paying quarterly dividends of 53.5 cents before the merger with Qwest in 2000.  Nacchio slashed the dividend to 5 cents a share annually, then eliminated it altogether in 2001.

While Qwest's dividend yield is about 4.5 percent now, it would be 3.2 percent based on Qwest's trading prices of $10 a share just before former CEO Dick Notebaert announced his retirement last summer.

The dividend will be payable on Feb. 21 to stockholders of record on Feb. 1.

Donna Jaegers, a telecommunications analyst at Janco Partners in Greenwood Village, said the quarterly dividend is a couple of cents higher than what she anticipated.

Jaegers said it might mean Mueller, who is expected to announce Qwest's strategic plan Monday, "won't be doing anything drastic in terms of investing in" TV services.

She is looking for Mueller to provide a plan to increase revenues, strengthen the company's nationwide fiber-optic business and better defend Qwest's 14-state core phone franchise from cable and wireless competitors.

smithje@RockyMountainNews.com or 303-954-5155

http://www.rockymountainnews.com/news/2007/dec/14/qwest-resumes-shareholder-dividend/