Windstream Holdings Inc. (NASDAQ: WIN) has managed yet again to keep up its quarterly dividend payment of $0.25 per common share. Any company that maintains its dividend is generally not a newsworthy announcement. Windstream is no ordinary company. What stands out here is that Windstream’s common stock dividend yield is above 11% on an annualized basis. We have worried about this dividend for quite some time, as have many other investors and market pundits.

If a company has a double-digit dividend yield, there are a couple of concerns that stand out immediately. First is the dividend coverage. Windstream had normalized earnings of $0.48 per share in 2012. It is expected to have normalized earnings of $0.37 per share in 2013 and $0.45 in earnings per share in 2014.

So how does it year after year manage to keep up this $1.00 per common share dividend? The company offers advanced network communications to businesses, which are said to include cloud computing and managed services. It has one of the most unusual dividend yields and methods of maintaining that yield that we are aware of, considering it is a member of the S&P 500 Index.

Another thing we would point out is that the outlook on this payment is rather long, compared to most dividend declarations. The dividend is payable January 15, 2014, to shareholders of record as of December 31, 2013. In short, that means that Windstream holders have to hold shares for almost two more months to receive that dividend.

Windstream also runs on low cash balances at the end of each quarter — very low. It carries a high debt load, it changed to a holding company structure parent company in September and it has said before that it has no plans to change its dividend policies.

This is one of those dividends that does not meet what we consider the proper safety requirements for most investors. That being said, it has maintained that same payout rate going all the way back to 2006. We would further point out that Windstream has a whopping 84.6 million shares in its short interest.

At $8.57, Windstream has traded in a range of $7.50 to $10.00 in the past 52-week period, and its market cap is almost $5.1 billion.

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