Valor promised its new shareholders $1.44 a share in dividends every year, on a stock sold at $15. That 9.6 percent yield was the whole pitch. The Irving, Texas, company owned about 548,000 telephone lines, mostly in rural parts of Texas, Oklahoma, New Mexico and Arkansas. It was the seventh-largest local phone company in the country outside the Bell system. When it went public in February 2005, investors were hungry for steady income, and small-town phone lines produced steady cash.

Lines Bought From GTE

Valor was built in 2000 by buying rural telephone businesses from GTE Southwest, now part of Verizon. In many of its towns, Valor was the only company offering a full set of phone, long distance and internet services. The bet was that rural lines would shrink slowly, if at all, and that careful cost control could turn them into dependable cash. Its main threats were cable companies and cell phones, which could pull customers away from the copper line.

The Birth of Windstream

Valor priced its offering at $15 a share in February 2005 and listed on the New York Stock Exchange. A year and a half later, in July 2006, it merged with the wireline business that Alltel spun off. The combined company took the name Windstream and became one of the largest rural phone companies in the country. The registrant behind this filing continued as Windstream.

Cover: Country Neighbors, Félix Hilaire Buhot. Art Institute of Chicago, public domain. Chosen for two neighbors meeting on a country road (local lines).