When looking for solid, dividend paying stocks to help augment a weakened income stream, avoiding the high buzz in favor of some good old-fashioned solid businesses can be a smart move. Lisa Springer looks into three high-yielding telecoms companies founded decades ago to provide local and long-distance landline telephone services to rural communities.

While the number of landline connections is contracting roughly 10% a year but these companies are offsetting eroding landline revenue with revenue from new services such as broadband Internet, digital TV and web hosting. These rural telecoms can offer rich income opportunities because of stable cash flow and modest spending.

Her three of my favorite high-yielding telecoms:

1. Consolidated Communications Holdings (CNSL) Yield: 8% with  about 230,000 local and long-distance landline customers, 110,000 broadband Internet customers and 33,000 digital TV subscribers.

2. Hickory Tech Corp. (HTCO) Yield: 5% with about 49,000 local and long-distance landline customers, 20,000 broadband Internet customers and 11,000 digital TV subscribers.

3. Warwick Valley Telephone Co. (WWVY) Yield: 8%
Warwick provides telecom services in the Hudson Valley between New York and New Jersey and have approximately 100 people. Warwick has a 104-year history of dividend payments, and payments have increased by a total of 30% in the past four years. The last increase was 8% March 2011, to a $1.04 annual dividend rate.


This is a small selection in one sector so we have a double problem of a small number in a single market so there will be volatility but worth measuring to see whether these are companies to consider adding to a long term portfolio. We will compare it with our broadly diversified dividend bearing ETF portfolio.