New Wall Street "Game": Who's Next to Cut Dividends
CNBC "On-Air Stocks" Editor
Who will cut their dividend next? It's one of the main sports on the Street, but Credit Suisse is trying to get a little more scientific about this.
MBIA yesterday joined a growing line of companies cutting their dividend, a group which now extends to Fannie Mae, Washington Mutual, National City, and Sallie Mae.
Using a method that extracts the forward implied dividend from options prices, Credit Suisse says that several large financials, including Citi,Countrwyide,Bear Stearns, and Merrill Lynch, as well as REITs like Equity Residential, General Growth, and Vornado, are likely to cut their dividends substantially.
In the case of Citi, Credit Suisse says the options market is implying an aggressive 60 percent dividend cut, despite the fact that management says they won't do it.