Why Frontier Communications Stock Fell 16% Today
Shares of Frontier Communications (NASDAQ: FTR) are on the fritz again. As of 10:45 a.m. EST, the stock had fallen 15.6% below Thursday's closing prices due to a bearish analyst note.
Bank of America/Merrill Lynch analyst David Barden slashed Frontier's price target from $19 to $4 per share, citing the regional telecom's unsustainable dividend policy. Frontier's stock currently offers quarterly dividend payouts of $0.60 per share, which works out to a titanic annual yield of 34% at today's share prices. Any reduction of that generous payout would drive a lot of investors away from this apparent cash machine, and Barden argues that the payouts soon will have to slow down or stop entirely.
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Source: Fool.com
