Patrick Harden

The Five Largest Quarterly Dividend Stocks

CapitalSource is almost certainly going to reduce its dividend. Consider the following comments from a recent press release: "Upon the closing of the asset acquisition from FIL, we expect to reevaluate our dividend policy and may decide to retain a majority of our earnings, consistent with dividend policies of other commercial depository institutions, to redeploy in attractive lending opportunities, subject to satisfying our minimum distribution requirements to qualify as a REIT for 2008."

iStar Financial and NorthStar Realty have plenty of capital gains available to support their dividend stream.

'SuperREIT' CapitalSource Swoops Up Fremont's Branches

I suppose I was unnecessarily snarky, but my major beef with CSE is that instead of trying to run one aspect of its business well, it continues to stretch itself thinner and thinner. Now it's going to be a mortgage REIT, a BDC, a healthcare net lease REIT, and a bank?

I just wonder how efficient CSE can be running a bank and balancing the fee income versus the 95% gross income test. I guess CapitalSource just wanted access to the discount window.

CapitalSource Can't Cover Its Dividend

I appreciate the spirited commentary about my article. This article was a follow-up to my recent article suggesting that CapitalSource might realize more efficiencies if it split its businesses. I believe that the tax treatment of CSE's dividends confirms that the nature of the company's business may not be best suited to the REIT structure. CapitalSource has executed well from an operational standpoint, but could unlock value by restructuring as a separate healthcare net lease REIT and a BDC that makes corporate loans. That's where CSE's competitive advantages lie.