Income investors know that dialing up telco providers is a good way to secure fat payouts, but hardcore yield chasers know that you can do better than the wireless carriers that are household names.

As impressive as AT&T (NYSE:T) and Verizon (NYSE:VZ) may seem, yielding 4.9% and 3.8%, respectively -- especially at a time when their smaller, profitless wireless carrier rivals aren't declaring quarterly distributions at all -- the highest-paying dividend stocks in this niche can actually be found among the ranks of regional telcos.

Windstream (NASDAQ:WIN), Frontier Communications (NASDAQ:FTR), and CenturyLink (NYSE:CTL) all sport chunkier yields than AT&T and Verizon.

There is a good reason for that.

AT&T and Verizon have been able to easily offset declining landline revenue by growing their booming smartphone volume. Regional carriers aren't as lucky. Growth has been harder to come by at Windstream, Frontier, and CenturyLink.

They're losing landline customers, too. They are making some of that back through broadband connectivity and business services, but that isn't enough in some of the rural markets where the regional players concentrate to avoid butting heads with the national giants in major metropolitan cities.

However, a voracious appetite for the highest-paying dividend stocks will naturally lead investors to explore these intriguing regional telcos. As luck would have it, all three report next week, affording investors the opportunity to get a great snapshot of three popular equities for income investors.


Latest Quarter

EPS (estimated)


Quarter EPS






Frontier Communications








Source: Yahoo! Finance.

Don't just jump on Windstream because it has the fattest yield. For starters, it's the only one of the three companies that's expected to post a year-over-year decline in profitability next week.

However, the big reason to be careful here is that the other two regional players have recently lowered their rates.

Windstream cut its quarterly dividend from $0.1875 a share to $0.10 a share last year. CenturyLink went from shelling out $0.725 a share every three months to $0.54 a share earlier this year.

It wouldn't be a surprise if Windstream eventually follows suit.

Despite declining profitability on an annual basis for a few years, Windstream has stuck to its quarterly rate of $0.25 a share. Its CEO publicly stood by that $1 annual dividend commitment back in February, but it can only be sustainable for so long if profitability keeps going the wrong way. It also probably wouldn't be a bad thing if Windstream did announce a decrease. Investors would finally be able to exhale as Frontier and CenturyLink stakeholders eventually did.

Get your camera ready. Three important snapshots are ready to be taken next week.