Windstream Corp. (NASDAQ: WIN) has done it yet again. The advanced network communications provider has announced that its $0.25 quarterly dividend will be paid out on its common stock. Normally we would not care about any dividend being maintained, but the reason this stands out is that so many investors do not believe that Windstream can maintain this dividend for much longer. After all, it is a yield of almost 12%.

To generate a yield of 12%, you might think that the company is a mortgage-backed securities REIT or maybe some highly leveraged junk bond fund that holds securities you cannot understand. This same $0.25 dividend has been paid out to holders each and every quarter since the end of 2006. What has been hard to fathom is that the dividend keeps getting paid and its stock has remained around $8.00 after hitting highs in the $13 and $14 handles in 2010 and 2011.

Windstream has a market cap that is currently right at $5 billion. It keeps a tiny cash balance on hand, and Yahoo! Finance gives it a shareholder equity (book value) of only about $1 billion. If you back out the goodwill and intangible assets, its net tangible assets are -$5.5 billion. Another problem is that it has over $8.1 billion in direct long-term debt.

If you want to know what else is driving the doubt here, just look at the NASDAQ short interest. As if July 15 that short interest was a whopping 78.5 million shares, worth over 12 days of volume at the time. This was the highest short interest reading of the last year.

Windstream’s payout ratio keeps astonishing as well. Thomson Reuters has consensus estimates of $0.41 in earnings per share for 2013 and $0.50 per share in 2014. How can a company with such low cash balances keep paying out $1.00 per year. For that matter, its revenue growth is expected to be negative almost 2% in 2013 and only 0.1% higher in 2014.

Windstream remains a mystery to many investors. That being said, it is going to maintain this double-digit dividend for at least one more payment.

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