A $14 Stock With a 7% Yield

Investors have been burned before...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

SPONSORED 5G Megastock Trades Under SECRET Name You won't find this 5G megastock on the NYSE, the AMEX or the Nasdaq. It's attracted more than $2 billion in investments from Wall Street... And it trades for only $3 a share. How will you discover the SECRET trade name? Get the urgent details from market mastermind Alexander Green in his latest TEK Talk. Click here to see more. SAFETY NET A 7% Yield With a Low Payout Ratio, But... Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Lumen Technologies (NYSE: LUMN) is somewhat of a rarity in the markets. It's a technology company with a very strong yield. Its 7% yield is more in line with those of master limited partnerships or beaten-up real estate investment trusts. But that's because it's the old debt-laden CenturyLink, a large internet provider. The company rebranded as Lumen Technologies in 2020. Free cash flow has been heading in the wrong direction the past few years. You can see below that it fell to $2.8 billion in 2020 from nearly $3.9 billion in 2018. The good news is that this year, free cash flow is forecast to be a little higher. It still won't be anywhere close to 2018's level, but if it stops falling, that's a good thing. Another good thing for Lumen is that it can easily afford its dividend. Even last year, when free cash flow was at its lowest point in three years at $2.8 billion, Lumen paid out only $1.1 billion in dividends for a low payout ratio of 40%. This year, Lumen is projected to pay out the same amount in dividends, but with the slightly higher expected free cash flow, the payout ratio dips to 37%. SPONSORED David Fessler Called Tesla at $8 (Split-Adjusted). His New 5G Recommendation Could Be Even Bigger... This 5G company has EVERYTHING going right for it: a top-shelf management team... scores of patents... partnerships with ALL the big telecoms... and FOUR straight quarters of revenue growth. Get the scoop here. Here's what's not so good... The dividend was cut twice in the past 10 years, including a drastic reduction in 2019 to $0.25 per share quarterly from $0.54. And this was after management had assured investors the prior year that the dividend was safe. Management said the cash saved by the lower dividend would be used to pay down debt. Lumen still has a lot of debt, though it's down a bit from when Lumen cut its dividend in 2019. Today, it has $31.5 billion in debt, including $3.8 billion that comes due this year, with just $486 million in cash as of the end of the first quarter. So while the company can easily afford the dividend, management has burned investors twice before. As then-President George W. Bush famously said, "Fool me once, shame on you. Fool me, you can't get fooled again." SafetyNet Pro won't get fooled by Lumen (the old CenturyLink). What Is SafetyNet Pro? SafetyNet Pro is a groundbreaking tool that predicts dividend cuts with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet Pro is reserved exclusively for subscribers of Marc's newsletter, The Oxford Income Letter. To learn more about SafetyNet Pro and The Oxford Income Letter, click here now.   Despite the low payout ratio, two dividend cuts, a recent decline in free cash flow and a big debt load mean the dividend is not safe. Dividend Safety Rating: D If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments section. Good investing, Marc Leave a Comment

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