Windstream (WIN) is a player in the rural telecommunications market. It provides wireline broadband services, telephone services, managed services and cloud computing. The company does not have wireless services as part of its business offerings. The stock is currently paying a monster 10.9% dividend yield. Looking at the competition, AT&T (T) pays 5.2%, Vodaphone (VOD) pays 7.4%, while CenturyLink (CTL) pays 7.8%. Market watchers wonder if the dividend is sustainable and if there is any significant upside potential. There are two major reasons Windstream’s dividend is under pressure. First, the company has seen a steady increase in debt over the past several years. Second, the company faces stiff competition from AT&T and CenturyLink, who have seen strong growth in market share in their wireless service segments.

Windstream’s first quarter 2012 results showed revenues from all sources of $1.55 billion, a half a percent increase from the same period in the previous year. Business services saw a 3.2% increase from the first quarter of 2011. Consumer broadband services saw a 5.9% increase on a year over year basis. The first quarter showed robust sales figures for the business and household segments.

The PAETEC acquisition has provided great opportunities in the business channel, and the consumer business is seeing solid returns from broadband services. Business services showed revenue of $897 in the quarter. Broadband sales provided $113 million in revenue in the same quarter. Business and consumer broadband revenues accounted for almost 68% of all revenues during the first quarter. The company had capital expenditures of $223 million in the first quarter, representing an 8.1% increase from the same period in 2011.To continue reading, click here.