Looking for a port in the storm of a persnickety market? Then take a long hard look at the telecommunications industry. This slice of the market has solidified its position as one of the highest performing segments for 2012. What makes these companies so appealing, aside from an established cash flow and nil exposure to capricious European markets, is a vigorous 12.2% collective yield this year. In addition, they provide services that people absolutely can’t do without in this age of ever burgeoning communication. Experts expect that integrated telecom firms will continue to go one better than other stocks because of the tempting package deals they offer consumers. Aside from the heavyweights such as Centurylink (NYSE: CTL) and AT&T (NYSE: T). there are a few emerging growth companies in this venue that are worth keeping an eye on. Lumos Inc. (NASDAQ: LMOS) is one of them.
The company is a fiber optic network service provider whose products include data, voice and IP services. It split from privately owned NTelos in August of 2011 and began public trading on the NASDAQ on November1of last year. The IPO was valued at $15 per share, but value has gone consistently down over the past year, bottoming out at $7.50. The good news is that analysts think that the worst is over for now. As of the beginning of November shares were rebounding, selling for over $8.25.
Like most companies, Lumos has had its share of growing pains, but there are positives that more than compensate for the negatives. The company is now on an upward trend. In anticipation of continued growth, Lumos has been raised to a buy from neutral status by D.A. Davidson. The stock pays a healthy 7.1% dividend and has an impressive list of mutual funds and institutions that hold shares. Net income has been positive the last three quarters. The company has a market cap of $176,478,211. Total revenue for Q3 of 2012 was $52 million compared with $51.6 million in Q3 of 2011 and 50.8 million for Q2 2012. CEO and President Tom Blitz noted that “for the first time in the company’s history, strategic data revenue represented half of our total revenue for the quarter and it grew sequentially by over 5%.” On November 1, 2012 the board of directors of Lumos declared a dividend on its common stock of $0.14 per share.
Any way you slice it, this company is worth a look in the near-term. Revenue is consistently up and the dividends that the company pays are attractive incentive to perspective investors. The performance of the telecommunications sector in 2012 is another good reason to check out this emerging growth offer.