Capstead Mortgage Cut Its Dividend For Third Consecutive Quarter, Wunderlich Securities Reports
October 29, 2010 10:17 AM
Capstead Mortgage (NYSE: CMO) cut its dividend for the third consecutive quarter, declaring a 3Q10 dividend of $0.26 per share, down from $0.36 the previous quarter, Wunderlich Securities reports.
“GSE buyouts of seriously delinquent loans from collateral pools triggered accelerated prepayments, resulting in faster premium amortization,” Wunderlich Securities writes. “This put pressure on net interest income, which is the main driver of Capstead's earnings. From current earnings reports, we believe the portfolio is stabilizing at an estimated 12% to 13% ROE.”
Wunderlich Securities said that it maintains its Hold rating, adding, “We have rounded our price target to $12 based on portfolio stabilization.”
Capstead Mortgage currently trades at $11.33.
