Investors love Alaska Communications Systems (Nasdaq: ALSK) for one quality above all else: a very generous dividend yield. But the payouts aren't quite what they used to be, and neither is the stock price:

Alaska Communications Systems Group Dividend Yield Chart

Alaska Communications Systems Group Dividend Yield Chart by YCharts

The regional telecom heads into Wednesday night's fourth-quarter report on shaky legs. In the third-quarter report, management said the dividend policy was under review with negative implications. A few weeks later, AlaskaComm brought out the hedge trimmers to slash the dividend by 75%. Share prices have fallen by 29% since that fateful announcement.

Analysts currently expect the company to report $0.03 of non-GAAP earnings per share on sales of roughly $84 million. By hitting those numbers, Alaska's financial health would be largely unchanged from the year-ago quarter. The company is scaling back dividend payouts to conserve cash in anticipation of higher network support costs and the entry of Verizon Communications (NYSE: VZ) into the Alaskan market.

Moreover, this move should accelerate the buildout of a 4G LTE wireless network. Look for more detail on the 4G plans in this week's earnings call. And don't panic if guidance for the next quarter looks a little skimpy on the bottom line: Alaska moved some of the 4G development costs into the next fiscal year as the selection of equipment vendors took longer than anticipated.

Thanks to the free-falling share price, AlaskaComm's dividend yields are beefier than Verizon's again. The current 6.6% annual payout nearly matches fellow regional operator CenturyLink (NYSE: CTL) at 7.2%. And if management decides to get back to quarterly dividends of $0.22 per share like the ones it used to provide, even the 8.9% yield of Frontier Communications (NYSE: FTR) would look skimpy by comparison. Management promised details on its long-term plans in this report, which could put a deadline on the skinny payouts.

I know, it's not a slam-dunk outcome. But I like telecom operators putting cash away for a rainy day and investing in next-generation networks. That's why I'm willing to bet my CAPS score on Alaska's long-term future. If the company starts to raise those dwindling payouts again, the stock price should follow -- thus reducing the yield for new investors, natch. So there's a brand-new bullish CAPScall on Alaska Communications in my all-star CAPS portfolio today.

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