BONDS
I have relatives that live in Alpharetta, Georgia. Great little town. Daytime population about 120,000, shrinking down to 57,000 residents in the evening. Where to all those people go at night? Back home, that’s where. Alpharetta has a nifty business model, having transformed itself in a few years from rural backwater to corporate refugee ghetto for companies seeking to relocate to a lower-tax jurisdiction. The message from the city elders to corporations seems to be a simple one: “come on down, we promise not to pluck you too badly”. Corporate branches or headquarters and numbers of employees include the following:
| 1 | ADP | 2,000 |
| 2 | McKesson | 1,905 |
| 3 | LexisNexis | 1,076 |
| 4 | Hewlett-Packard | 953 |
| 5 | Verizon Wireless | 817 |
| 6 | AT&T Mobility | 751 |
| 7 | Comcast | 729 |
| 8 | Cox Communications | 676 |
| 9 | Equifax | 675 |
| 10 | E-Trade | 587 |
So what’s this mean? Only that the city seems to be rolling in dough, building new parks, greenways and other little quality-of-life projects. The in and outs of the city budget is shared with the citizens. For a young city, unlikely that they’ll face unfunded pensions liabilities in the near future. And their muni bonds will probably rise in value. Now I just have to figure out a way to get me some.
RANDOM HUMBUG
Bloody Christmas lights – every year more of them break or flame out. And every year, I put up less.
RANDOM DIVIDENDS
After reading the write-up from Dividend Ninja, I was starting to get all googly-eyed over Rogers Sugar (RSI.TO). Great 6.4% dividend and low payout ratio. Sweet! Fits in nicely with my “Booze-and-smokes-and-other-stuff-people-gotta-have”.
But, putting the kibosh on that, how about a stupid idea from our neighbors in Canada.
How To Make A Sugar Tax Easier To Digest
In the fight against rising obesity, policy makers looking to wield taxes as their weapon of choice should aim them at sweet-food producers and not the prices at the vending machine, say two economists at Iowa State University. Hungary and Denmark approved new laws this year forcing consumers to pay more for foods high in fat, and similar bills are being discussed across the United States. Revenue collected is usually ear-marked for health care.
Not that this type of tax would affect Rogers Sugar in a significant way. They’ll just pass it on. As for the desired result? Read on further into the article:
Much analysis on the subject of so-called “fat taxes” has shown that small to moderate taxes on high-sugar or high-fat foods would have little impact on consumption. But if the goal is to reduce the amount of calories consumed in the food people are already eating, taxing producers makes more sense, according to research recently published in the journal Contemporary Economic Policy.
I added the emphasis. Stupid academics.
[ from "Cool Hand Luke" ] Captain, Road Prison 36: You gonna get used to wearin’ them chains after a while, Luke. Don’t you never stop listenin’ to them clinking. ‘Cause they gonna remind you of what I been saying. For your own good.
Luke: Wish you’d stop bein’ so good to me, cap’n.
RANDOM PIZZA
Boston Pizza Royalties Income Fund (BPF.UN :TSE) pays out about 7.97%, a monthly dividend of $0.09 or so per share. Might go nice with my ABV and MO stockis. It’s pizza! What’s not to like?
At this point I should probably insert one of those odious little disclaimers so often seen on Seeking Alpha “The author has no positions in any of the above mentioned securities, and no plans to initiate a position within the next 72 hours”. I might add that I’m thinking hard about it.
Any readers out there who buy individual bonds? Are targeted consumption taxes stupid and ineffective, or a boon for health-care companies?
That is a nifty little model. It happens so much. Money will go where it is treated nicely.
Roshawn @ Watson Inc recently posted..3 Powerful Ways To Decrease Your Financial Stress
Right, just like people…
[...] Random Dividend Thoughts and Stupid Taxes (101 Centavos) [...]
I’ve never bought individual bonds and don’t plan to.
Cigarettes and alcohol are taxed pretty heavily and I’m sure that reduces their consumption somewhat. I don’t want any more taxes but I do like taxes that I can mostly avoid.
Andy Hough recently posted..Online Income Report – November 2011
Hi Andy – thanks for your comment. Personally, I think that “sin taxes” are highly regressive. The lower consumption — which is the desired result — is offset by economic hardship on lower-income people.
I leave my bond selections to my fund managers, a.k.a. professional money guessers and part-time meteorologists.
Haven’t even bothered with the Christmas lights so far this season, except for our brilliant tree. I’m still marvelling at our new roof that was just completed this week. I don’t think I want to detract from the newness of this asphalt masterpiece until it has settled down, maybe next year.
Hunter – Financially Consumed recently posted..Ready, Set, Weekend
LOL!! Part-time meteorologists. Would that they be that accurate! We did our Christmas tree last night. Broke down and got one from a chain store for half-price instead of supporting our local tree farms.
Mate, how has your portfolio performance including your dividends done this year I’m curious to know?
thx
Financial Samurai recently posted..The Easiest Way To Get What You Want And Achieve What You Deserve
Good question. If limited to the original 7 stocks when I announced the portoflio in January (except for EVEP, I sold it to raise cash), the portfolio is up 7.09% YTD. Dialing in the same recent share prices for the expanded portfolio, to include stocks added through the course of the year, the return is slightly less, 6.27%. TNK having taken a major dump hasn’t helped much.
That was a very interest bit of trivia 101c! Who would’ve thought!
On Christmas lights, I bought some LED lights this year. Let’s see if it holds up to its promise of reliability!
Moneycone recently posted..If You Own Mutual Funds Or ETFs, Don’t Ignore This Metric
How about the government end the patent privilege monopoly and stop subsidizing CAFO and penalizing non-CAFO. That would be better than a fat tax.
Invest It Wisely recently posted..5 Ways to Avoid Debt This Christmas
[...] Random Dividend Thoughts and Stupid Taxes (101 Centavos) [...]
[...] Centavos: Random Dividend Thoughts and Stupid Taxes – I think the “bad food” tax that 101 mentions is also a convenient way for those [...]
I didnt know that about alpharetta – that’s pretty neat. I have been to the area before and know the traffic sucks, this is probably one reason.
Jeff @ Sustainable life blog recently posted..Why Saying No is Good Sometimes
The traffic along the 440 blows, that’s for sure.
Ingenius move by Alpharetta. We need more out of the box thinking from our entire country! Ok, I’m done with my soapbox rant. Sin tax? Sounds great on paper. Are there any studies with consumption after a tax is applied or raised? I’m thinking the consumers who are hooked on sin products don’t care what tax they pay. Having the tax funds go to healthcare, pretty slick!
Buck Inspire recently posted..Incrwd: Reward Your Readers
Hi Buck – there’s been some research done in NY, showing a decrease in cigarette consumption. *However*… that’s only on recorded sales. There was also a predictable increase in smuggling and related crime. Unintended consequences, and all that….
101 Centavos,
Just so you know, I found out after the fact that many of the previous Income Trusts in Canada, which converted to corporations, don’t use EPS to measure their payout ratios. They use distributable cash flows instead of earnings to measure their payout ratios. I just emailed Rogers Sugar this morning to get some info. I’ll post back if I find anything out.
http://www.dividendninja.com/what-happened-to-the-income-trusts-2
However I do love this company, and hold the stock. It’s a product I know and use, the main sugar supplier here, low debt, a great dividend, and a long corporate history here in western Canada.
Cheers
The Dividend Ninja
Hi Ninja – thanks for the link. Great article on differentiating EPS and FFO. And too bad on LIQ. I used to have them, only to discover from my brokerage that dividend reinvestment was not offered for LIQ. I sadly had to sell.
101 Centavos, what’s your opinion on LIQ ? I still hold it, though I don’t DRIP it.
Cheers!
The Dividend Ninja recently posted..The Weekly Lineup: 10 Days before Christmas Edition
What’s not to love about LIQ? Hard enough to find a good booze stock, let alone one with a monthly div. Hated to dispose of it. I’m now looking at TAP. A little anemic, but it might have to do.