CenturyLink (CTL) – Are Shares Too Cheap To Ignore?
Broadband and telecommunication provider CenturyLink (CTL, $27.29, up $2.70) surged 10.98% after the company reported 4th quarter results that beat on earnings and revenue. For the quarter ending December 31, it reported earnings per share (EPS) of $0.80 on $4.476 billion in revenue, up from $0.60 on $4.144 billion in revenue a year ago. Analysts had expected EPS of $0.65 on $4.420 billion in revenue. For 1st quarter 2016, the company forecasts EPS of $0.67 to $0.73 on $4.40 to $4.45 billion in revenue. For year 2016, the company forecasts EPS of $2.50 to $2.70 on $17.55 to $17.80 billion in revenue and $1.9 billion in free cash flow (FCF). This is much better than EPS of $2.36 that investors were expecting for 2016. However, this is down from 2015 EPS of $2.71 on $17.9 billion in revenue and $2.7 billion in FCF.
The $14.89 billion company had 6.1 million broadband subscribers and 58 data centers as of December 31, 2014. From March 2010 to December 2012, the company gave out $0.73 per share in dividends each quarter. Since March 2013, it gave out $0.54 per share in dividends every quarter. Other than the dividend cut at the end of 2012, dividends have been flat. Thus, we can assume that dividends would probably remain about $0.54 per share, which is currently an 8.12% yield. Trailing PE is 20.99, while forward PE is 11.05. AT&T (T) has a trailing PE and forward PE of 15.28 and 12.15, while Verizon (VZ) has a trailing PE and forward PE of 11.30 and 12.14, respectively.