Chatter Around the World – 92

Chatter Around the World is a curated weekly update of articles related to economics, investing, dividends and personal finance. In these weekly updates, I also capture my blog updates and news related to my portfolio holdings.

Food Habits

Changes in Food Habits in the past 22 Years

New Blog Posts

Let’s dive into the links that caught my attention this week.

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Omega Healthcare (OHI) Dividend Increase

Omega Healthcare Investors Inc (OHI) announced that its quarterly dividend will be raised by 1.88% from $0.53 to $0.54 per share. This dividend increase is the company’s eleventh consecutive quarterly increase. Because the company is merging with AVIV REIT, the next payout will be a pro-rated dividend of $0.18 scheduled to be paid on May 15, 2015 to shareholders on record as of Apr 30, 2015. The new dividend rate results in an annualized yield of 5.65% based on today’s closing price.

C. Taylor Pickett, President and CEO of Omega stated, “We are very pleased to have closed the Omega/Aviv merger on April 1st and we are working together on a combined basis sourcing growth opportunities. The merger closed later than we originally expected and we issued equity earlier and in a larger amount than we had originally planned. Therefore, our first quarter guidance is less than we planned and our quarterly run rate is a quarter behind our initial guidance. Our quarterly run rate, annualized using the mid-point guidance for the third quarter, is $3.08 per share for AFFO and $2.84 per share for FAD.” Mr. Pickett continued, “We are excited about our continued growth prospects and our outlook going into 2016.

 

My portfolio consists of 102 shares of Omega Healthcare, which increases my annual OHI dividends from $216.24 to $220.32, an increase of $4.08.

Kinder Morgan Inc (KMI) Dividend Increase

KMI
Kinder Morgan Inc (KMI) announced a 6.67% increase in its cash dividend! The quarterly cash dividend will increase from $0.45 to $0.48 per share and payable on May 15, 2015 to shareholders on record as of Apr 30, 2015 and ex-div date of Apr 28th. The annual dividend rate goes up from $1.80 to $1.92. Yield going forward is 4.42%.

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The Problem with ETFs

ETF

We read everyday on the media sites and blogs across the web that Exchange Traded Funds (ETFs) are the best options for investors as they are a cheaper alternative to mutual funds and are a great way to invest. While I agree with that viewpoint, I think it is important to also consider the problem with ETFs.

This post is inspired by a comment from Monsieur Dividende on my post on The Importance of Diversification. In that article, I discussed why it is important to diversify and how studies have shown that unique risk decreases significantly even with as little as 12 stocks in a portfolio. MD made a point that once you get to a high number of holdings, say 40-50 stocks, you are better off simply owning an ETF. While I agree that most investors are better off investing using ETFs, I have a couple of counter arguments to that point.

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Are Tobacco Stocks Still A Good Investment?

Tobacco Stocks

One category of investments that are popular with investors and have done well over the years are the Sin Stocks. These are investments in industries and sectors that are considered unethical or immoral, which include companies in alcohol, tobacco, sex-related, weapons manufacturing and military industries. This post will take a close look at the tobacco industry and presents some of the risk/reward considerations to keep in mind and evaluate: are tobacco stocks still a good investment?

I personally have no qualms about investing in the sin stocks for the sake of ethics, as any company that is worth its salt is probably stepping on other’s toes. The business world is brutal – and needs to be, in order to survive and be successful. Jason at Dividend Mantra had a post touching on this subject recently – entitled How Ethical Can an Investor Be? I agree with his points where he points to the questionable behavior of smartphone sweatshops and other industries. Same goes for the industries that most people consider benign, such as say, the food industry – if anyone takes the time to look into how animals are raised in our current conventional animal farming, it is truly horrifying. But that is a story for another post. Let’s jump into the subject of tobacco stocks.

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