Author Topic: CTL - CenturyLink  (Read 75376 times)

Valuehalla

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Re: CTL - CenturyLink
« Reply #270 on: November 15, 2018, 05:27:22 AM »
As expected, CTL declared quarterly dividend: 0,54$ per share will be paid on 7th Dec

Thats 2,16$ per year = 11,3% divi rate p.a. on the share price of 19,07 $ (yesterday)

All as expected and announced from the management.

Since 2 years we saw sensless debates about "how safe is the divi", although payout ratio went massivly down from high 70th to mid 50th now and although all the time management was totally committed to the divi.
« Last Edit: November 15, 2018, 05:37:34 AM by Valuehalla »
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petec

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Re: CTL - CenturyLink
« Reply #271 on: November 15, 2018, 08:42:29 AM »
As expected, CTL declared quarterly dividend: 0,54$ per share will be paid on 7th Dec

Thats 2,16$ per year = 11,3% divi rate p.a. on the share price of 19,07 $ (yesterday)

All as expected and announced from the management.

Since 2 years we saw sensless debates about "how safe is the divi", although payout ratio went massivly down from high 70th to mid 50th now and although all the time management was totally committed to the divi.

Out of interest why are you so focussed on the dividend? The dividend bears no relation to the intrinsic value of the company and if it is too high relative to long term sustainable cash flow then it represents a material threat to equity holders. The fact that they insist on paying it might indicate confidence, or it might indicate stupidity. The equity value in 5 years' time might well be far higher with a lower dividend and lower debt than it is with a higher dividend and higher debt. And you need to own it for 9 years to make your investment back in dividends, so if equity value is meaningfully impaired in 5 you're done for.

The payout ratio has not gone into the 50's on a sustainable basis: they were very clear on the call that it's in the low 70's excluding one offs, so there hasn't been a lot of progress on that front.

matts

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Re: CTL - CenturyLink
« Reply #272 on: November 15, 2018, 09:51:27 AM »
I would guess that there is some overhang on the stock price because some investors (not many anymore) think it will get cut and the stock will take a big hit. But I agree with you, it's not a dividend story as far as value is concerned. I'm long the stock and I find Valuehalla's take on events a bit too rosy. There are real risks to this thesis. And the thing is, if all those revenue losses are not just unprofitable contracts, but you know, real business, it's not something Storey can be pinned on. He can just keep singing the same tune for a few more quarters regardless of what is really going on, while the stock drifts lower. Yes, he takes a financial hit when the stock falls, but my point is this is one of those situations where you will never prove that management misled investors.

Cigarbutt

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Re: CTL - CenturyLink
« Reply #273 on: November 15, 2018, 10:29:18 AM »
^Just finished reviewing and updating. Too hard pile (business and room for error).
The last input was the following, which I thought useful in terms of different potential scenarios analysis:
https://deconstructingrisk.com/2018/11/13/ctl-pain-before-gain/
Good luck to all.

Valuehalla

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Re: CTL - CenturyLink
« Reply #274 on: November 16, 2018, 02:36:05 AM »
As expected, CTL declared quarterly dividend: 0,54$ per share will be paid on 7th Dec

Thats 2,16$ per year = 11,3% divi rate p.a. on the share price of 19,07 $ (yesterday)

All as expected and announced from the management.

Since 2 years we saw sensless debates about "how safe is the divi", although payout ratio went massivly down from high 70th to mid 50th now and although all the time management was totally committed to the divi.

Out of interest why are you so focussed on the dividend? The dividend bears no relation to the intrinsic value of the company and if it is too high relative to long term sustainable cash flow then it represents a material threat to equity holders. The fact that they insist on paying it might indicate confidence, or it might indicate stupidity. The equity value in 5 years' time might well be far higher with a lower dividend and lower debt than it is with a higher dividend and higher debt. And you need to own it for 9 years to make your investment back in dividends, so if equity value is meaningfully impaired in 5 you're done for.

The payout ratio has not gone into the 50's on a sustainable basis: they were very clear on the call that it's in the low 70's excluding one offs, so there hasn't been a lot of progress on that front.

THX Petec for comments. The management is not only commited to the dividend. They said clearly during all last conference calls: They will increase EBITDA, EBITDA margins and FCF....(from year to year & over the next few years !!!) and they will eliminate unprofitable revenue and they will reduce debt. All of this happened till now. I have no reason to doubt.

It is more likely that they know what they are doing and predicting and its more unlikly they do a fraud to us investors by telling lies.

We will get next guidance for whole 2019 already in app 3  moth. Than we know more about FCF in 2019 and payout ratio.
For today i am happy we are in the mid 50th.

Even if you bought CTL on the high price levels, two years ago - after the aqcuisition was announced - around 25 $ ... you dont have a big loss today, cause you got already 2 times 2,16$ dividend. Not talking about the scenario, if you invested when the price was down mid 13$ in Nov 2017. Or in other words from 9 years, 2 years are already done.
« Last Edit: November 16, 2018, 03:26:03 AM by Valuehalla »
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petec

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Re: CTL - CenturyLink
« Reply #275 on: November 16, 2018, 05:48:23 AM »
As expected, CTL declared quarterly dividend: 0,54$ per share will be paid on 7th Dec

Thats 2,16$ per year = 11,3% divi rate p.a. on the share price of 19,07 $ (yesterday)

All as expected and announced from the management.

Since 2 years we saw sensless debates about "how safe is the divi", although payout ratio went massivly down from high 70th to mid 50th now and although all the time management was totally committed to the divi.

Out of interest why are you so focussed on the dividend? The dividend bears no relation to the intrinsic value of the company and if it is too high relative to long term sustainable cash flow then it represents a material threat to equity holders. The fact that they insist on paying it might indicate confidence, or it might indicate stupidity. The equity value in 5 years' time might well be far higher with a lower dividend and lower debt than it is with a higher dividend and higher debt. And you need to own it for 9 years to make your investment back in dividends, so if equity value is meaningfully impaired in 5 you're done for.

The payout ratio has not gone into the 50's on a sustainable basis: they were very clear on the call that it's in the low 70's excluding one offs, so there hasn't been a lot of progress on that front.

THX Petec for comments. The management is not only commited to the dividend. They said clearly during all last conference calls: They will increase EBITDA, EBITDA margins and FCF....(from year to year & over the next few years !!!) and they will eliminate unprofitable revenue and they will reduce debt. All of this happened till now. I have no reason to doubt.

It is more likely that they know what they are doing and predicting and its more unlikly they do a fraud to us investors by telling lies.

We will get next guidance for whole 2019 already in app 3  moth. Than we know more about FCF in 2019 and payout ratio.
For today i am happy we are in the mid 50th.

Even if you bought CTL on the high price levels, two years ago - after the aqcuisition was announced - around 25 $ ... you dont have a big loss today, cause you got already 2 times 2,16$ dividend. Not talking about the scenario, if you invested when the price was down mid 13$ in Nov 2017. Or in other words from 9 years, 2 years are already done.

I'm not worried about fraud. I'm worried they fail to pay down enough debt and then (in several years) find they can't sustain ebitda.

They have been very clear that capex will rise again and that they are not at a 50's payout on a sustainable basis. Don't kid yourself that they are. Yes, if they do something extraordinary with costs and ebitda next year they might get there, but it is a stretch, and I wouldn't count those chickens before they hatch.

Valuehalla

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Re: CTL - CenturyLink
« Reply #276 on: November 16, 2018, 06:13:07 AM »
I agree on your view, that there is a risk. But its small in my opinion, thats why i am positiv.

Investment is always connected with risks.

CTLs huge fiber footprint is needed and someone will pay for the use. We will not see it going in chapter 11
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petec

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Re: CTL - CenturyLink
« Reply #277 on: November 16, 2018, 06:37:25 AM »

CTLs huge fiber footprint is needed and someone will pay for the use. We will not see it going in chapter 11


Someone will certainly need to pay. Whether they need to pay enough to support an EV of $60bn is another thing. But I remain long, for now, and I hope you are right.

longinvestor

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Re: CTL - CenturyLink
« Reply #278 on: November 16, 2018, 11:59:30 AM »

CTLs huge fiber footprint is needed and someone will pay for the use. We will not see it going in chapter 11


Someone will certainly need to pay. Whether they need to pay enough to support an EV of $60bn is another thing. But I remain long, for now, and I hope you are right.

CTL is sitting on the best fiber assets. Comcast inked a DF deal with LVLT in 2005 for 20 years (I believe); Too bad for us shareholders that it was a giveaway. But we will see how the marketplace is when that that comes up for reneg. It is only 6 years from now (sigh!). Comcast Business nationwide rides on that DF. Keeping a seat at the table in a fully consolidated telecom world is key. Getting paid a (fat)dividend to wait for that is a big deal for long termers like myself.

petec

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Re: CTL - CenturyLink
« Reply #279 on: November 20, 2018, 07:29:02 AM »
Atilla Tinic leaves to become CIO at Dish.