Highest Yielding S&P 500 Stock Cuts Dividend
The highest yielding S&P 500 stock announced on Friday that they will cut their dividend beginning in September.
Frontier Communications (FTR: 7.125 +1.79%) announced Friday that their Board of Directors has decided to cut their quarterly dividend by 25% to $.1875 per share.
The dividend cut will reduce FTR’s yield from a whopping 13.1% down to 9.8% based on Friday’s closing price.
The dividend cut was not a big surprise to investors as the company had announced last year that they intended to reduce their annual dividend to $.75 per share once their asset purchase with Verizon (VZ: 50.21 +0.04%) was completed. That transaction was completed on July 1, 2010. Even after the dividend cut, Frontier will still be the highest yielding S&P 500 stock.
FTR shares fell 0.8% on the news Friday, but the stock remains a high quality dividend play despite their high payout ratio.
The reduced dividend will be payable on September 30, 2010 to shareholders of record as of September 9, 2010.