The recent rally in Frontier Communications (FTR) proves that the market pays entirely too much attention to dividends. The communications stock remains incredibly risky, but is a better bet now without the dividend payouts and a still beaten down stock price.
Source: Frontier Comm. Q1'18 presentation
Dividend Cuts
The problem with the current market is that the structure doesn't allow companies flexibility around dividend decisions. Lots of investors like the consistency of dividend payouts, but the flip side is the negativity attached to the companies that alter the capital return plan via payout cuts or a focus shift to more flexible stock buybacks.
