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
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