From TheStockMasters
What do all investors want in this day and age? To bank some serious coin, of course.
Today is your lucky day, Stock Masters. I’ve decided to throw you a bone on a stock I’ve been I’ve been keeping an eye on for quite some time now. First of all, for all you chart lovers out there on the Internet:
Notice the Quarterly Dividend rate, currently 9.00% baby. Daddy needs a new pair of shoes, and damn it, it’s time to stop messing around with stocks that don’t pay Dividends! Seriously people, what other reason is there to buy a stock? Take a look at your portfolio — toss half of your non-dividend paying stocks the garbage. If the existing bull market stops, you need to have a diversified portfolio that includes dividend stocks.
I could go on and on about Dividends but if you’ve been following the site, we’ve already crammed enough of that down your throat. For those of you who aren’t constant readers, see our list of Dividend stocks for 2007 (you’d have booked a gain of 47% so far this year if you bought these back on January 17th when the article was published).
Enough of the lecture, let’s talk more about CSE. Even the name of this stock, CapitalSource Inc. (NYSE:CSE) is synonymous with banking coin. Here’s the Source of Capital –
CapitalSource Inc. is a commercial lending, investment and asset management company focused on the middle market. The Company operates as a Real Estate Investment Trust (REIT) and provides senior and subordinated commercial loans, invest in real estate, engage in asset management and servicing activities, and invest in residential mortgage assets. On January 1, 2006, it began operating in two segments: Commercial Lending & Investment and Residential Mortgage Investment. The Commercial Lending & Investment segment includes commercial lending and investment business, and the Residential Mortgage Investment segment includes activities related to the residential mortgage investments. During the year ended December 31, 2006, the Company diversified its business to include real estate lease financing products and asset management services. During 2006, the Company began acquiring real estate for long-term investment purposes, all of which involved healthcare properties.
You‘re probably thinking “Wait, don’t all the popular media outlets bombard me with news about the crashing real estate market and subprime woes every 5 minutes?” Here’s a Newsflash folks: pretty soon we’re going to run out of land. According to the US Census, the Nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population size. 2050 is a long way off, but even 20 years from now, in 
2027, there is going to be a huge increase in populace, and real estate will be even scarcer than it is today. That’s a little extreme, I guess people could live in underground cities or somehow find a way to live underwater in the ocean, but the bottom line is that prime real estate markets will substantially increase in value over the next 20 years.
Another newsflash, literally as I write this article at 9:30pm Pacific Time on 05/17/07, news has just come out that CSE is buying out TierOne Corp. (TONE) for $652 Million. That’s a pretty nice premium for TONE… $34.46 for each TierOne share in the cash and stock deal, representing a premium of 38.3 percent over TierOne’s closing price of $24.92 on Today.
In light of the buyout news, I’m going to say hold off on CSE for a little while (the buyer of a company typically has some short term downside after a buyout is announced) but we recommend that you keep an eye on CSE. If you see it drop to the low $20’s, it’s time to buy buy buy.
Article written by: Eric Cheshier
Article posted on: May 19th, 2007
Disclaimer: The Author owns none of the stocks mentioned during the time of this publication.
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