Dividend investors love big yields, and when it comes to rural telecommunications companies, you won't find a better yield than the one Windstream Holdings (NASDAQ:WIN) sports. Even as its rivals have reduced their payouts over the years, Windstream has managed to sustain the biggest dividend yield in the S&P 500 (SNPINDEX:^GSPC). Although some investors are skeptical about Windstream's ability to keep paying that dividend, the recent announcement of a transformative event for the company could give some investors even better returns on their Windstream stock.

Telecom stocks are notorious for their rich dividend payouts. Because their extensive networks generate so much non-cash depreciation, GAAP earnings for telecoms often match up badly with actual available cash flow for distribution to shareholders. Yet even as Frontier Communications (NASDAQ:FTR) and CenturyLink (NYSE:CTL) have chosen to reduce their payouts, Windstream has held firm. Let's look at three ways that Windstream deserves to be considered a top dividend stock.

1. Windstream Holdings has the best yield in the S&P 500.

Source: 401(k) 2013.

By one key definition, Windstream is simply the top dividend stock in the S&P 500. Not only is its yield the highest in the index, but at 8.7%, it beats out No. 2 player Transocean by more than a full percentage point. Windstream also stays well ahead of Frontier and CenturyLink, both of which are in the 5% to 6% range currently.

Some investors might worry that Windstream's leading dividend yield has fallen dramatically. Indeed, over the past year, the company's yield has come down from as high as 14%. But what's especially noteworthy is that Windstream's dividend yield has come down not because of a reduction in its quarterly payout to shareholders, but rather because of its impressive share-price growth. Early in 2014, gains came largely from improving prospects in its core business segments. More recently, investors have gotten excited about Windstream because of its decision to restructure its internal operations. In any event, investors have gotten not only the positive impact of a solid dividend yield but also gains of more than 45% this year.

2. Windstream Holdings has sustained its payout when others haven't.

Another way in which Windstream stands out is in its ability to sustain its dividend. By contrast, Frontier Communications has cut its dividend twice in the past several years, and its payout is now fully 60% below what it used to give to shareholders. CenturyLink's dividend cut was less dramatic at 25%, but given that it already traditionally paid slightly less than its two telecom brethren, CenturyLink lags behind both Frontier and Windstream.

Source: Images Money.

Shareholders have been able to rely on Windstream's current $0.25 quarterly dividend consistently for more than four years. Despite concerns about whether Windstream brings in enough money to pay that dividend without perilously expanding the levels of debt on its balance sheet, the company now appears poised to move into a new transformative phase that will have dramatic implications for income investors.

3. The new restructuring will give Windstream Holdings investors even more opportunities to generate income.

Windstream announced just a couple months ago that it would change its corporate structure to take advantage of the tax breaks available to real estate investment trusts. Under the proposed deal, Windstream will take its network assets and put them into a REIT, spinning that entity off and giving shareholders stakes both in that business as well as its continuing service-providing unit. The services company will lease the network infrastructure from the REIT, providing the REIT with a stream of income it can return to its investors.

Source: Windstream.

For dividend investors, the move will have mixed effects. On one hand, the service-provider unit will see its dividend shrink substantially, at least until it can come up with growth initiatives of its own. Meanwhile, the REIT will be required under tax law to return 90% or more of its income to shareholders, providing even more reliable income for those who rely on dividends.

At this point, Windstream is in the midst of transition, and investors have to be prepared for bumps along the way. In the long run, though, the company's move should help it resolve part of its debt issues while giving income investors the ability to concentrate on what to them is the most promising part of Windstream's overall business.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.