This has been a rough year for CenturyLink (NYSE:LUMN) investors, and we're only thigh deep into March. Shares of the out-of-favor telco have tumbled 22% so far in 2019, hitting 24-year lows on Monday after another problematic development.

This week's tumble is the handiwork of CenturyLink announcing that it will be late in filing its annual report with the SEC on Monday. The provider of residential and enterprise communications services warns that it has identified accounting issues related to its 2017 acquisition of Level 3 Communications. Scorched investors are clearly selling their shares, so let's see if opportunistic market watchers should be pouncing on the opportunity.

The lobby of a CenturyLink office with its services on display.

Image source: CenturyLink.

We keep getting disconnected

The thorny weakness in internal controls is just the latest cherry to top this sad, sad sundae. CenturyLink investors took a hit last month after the company posted disappointing quarterly results. Pro-forma revenue declined nearly 4%, falling short of expectations.

Shrinkage of its organic results isn't shocking. Regional telcos are facing stiff headwinds, and it isn't a surprise that all six of CenturyLink's revenue segments declined slightly for all of 2018. Acquisitions may temporarily lift results, but the default setting here is a downward-spiraling staircase. Wall Street pros see CenturyLink's top line sliding slightly again this year as well as for 2020.

However, the real dagger in last month's fourth-quarter results was the announcement that it would be cutting its dividend by more than half. Income investors had flocked to CenturyLink for its juicy distributions, and the move sliced its yield from 14.7% to 6.8%. That stings, but let's break from this double-digit payout eulogy to sing some of the praises for considering a purchase of the stock here at its multiyear low.

Let's start with that dividend, and we need to point out that the stock's belly flop of a dive since last month's grim financial update has pushed the yield up to 8.2%. CenturyLink's quarterly disbursements were never going to be sustainable for the long haul. You have to go all the way back to 2010, when the stock didn't have a payout ratio above 100%. Analysts see CenturyLink earning $1.23 a share this year, so the new rate of $0.25 a share in quarterly disbursements means that this should be the first time in nine years that CenturyLink earns enough to cover its payout.

Check out the latest earnings call transcript for CenturyLink.

Expectations can change, of course, but CenturyLink has been pretty resilient on that front. It has met or exceeded Wall Street's profit targets in each of the past four quarters.

CenturyLink also hasn't finished cutting costs since absorbing Level 3 into its bloodstream in a $34 billion deal that closed in the latter half of 2017. CenturyLink has identified additional synergy savings that will shave an annualized $800 million to $1 billion over the next three years.

Income investors have bailed on CenturyLink, but one can reasonably argue that its current payout of 8.2% is a pretty healthy trickle of distributions. The rate should be sustainable for at least the next couple of years -- and possibly longer if CenturyLink can live up to the cost savings or find a way to start growing its revenue again. CenturyLink isn't pretty, but it is a buy at current levels.

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