SureWest Communications has decided to end the practice of paying quarterly dividends to shareholders after June, marking the end of a tradition spanning more than 50 years. This could prove to be a very controversial decision in telco land, where shareholders love collecting those dividends. However, SureWest says the money it could keep in house by not paying 25 cents-per-share dividends could be put to good use fueling the company's current growth strategy, which in turn will help the company's overall value grow (it hopes).
As the landline voice business declines, SureWest has been doing everything it can to offset the decline by launching new services, and by embarking on a strategy to acquire companies that share its fiber-to-the-home sensibilities. Applying dividend money to the build-out is certainly no sure thing for SureWest, but it is in line with the company's willingness to bet aggressively.
- read this report at The Sacramento Bee