Highly Indebted Companies

A common reason to stop dividend payments is to make sure companies can keep making debt payments. A heavy debt load gives firms much less financial flexibility, particularly at a time when credit markets and banks are wary of troubled firms.

On the edge: Many of the firms with the highest total debt-to-equity ratio in the S&P 500 don't pay a dividend. But two that do are both telecommunication services firms, Windstream (WIN) and Frontier Communications (FTR). Both also have a high dividend yield of about 12%, indicating investors are wary of the dividends' sustainability. A Windstream spokesman said the company expects to generate at least $685 million in free cash flow this year, "which leaves the company ample cash flow to continue to support the dividend going forward." A Frontier spokeswoman said commenting on such matters was against company policy.