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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Carl Worth who wrote (26501)	4/13/2007 4:57:40 AM
From: a128	Read Replies (2) \| Respond to of 78740

AG Edwards comment on AHM a day or two ago... The problem I have is if he doesnt think the dividend will fall further, then ONLY a $23.50 target ? I think if they sustain a $2.80 dividend for the next few years then the stock is going a lot higher than $23.50. -------- AG Edwards analyst Greg Mason said the key to determining whether the stock has fallen too far is predicting what the company will do with its dividend. After paying a quarterly dividend of $1.12 last quarter, American Home Mortgage said it will pay a dividend of 70 cents this quarter. Considering the stock closed at $19.55 Tuesday, Mason said an annual dividend of $2.80 is fat. A stock that yields a dividend of 14.3 percent is attractive, he said. "The question remains, can the dividend fall further?" he wrote in a client note. "We believe the answer is no." He expects payment defaults to decline as the company stops lending to riskier borrowers. He forecasts some profit deterioration, but believes the $2.80 annual dividend will remain intact. He upgraded the stock to "Buy" from "Hold." His price target on the stock is $23.50.