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You know that buying a stock makes you part owner of a company, theoretically with millions of other people. But, while ownership has its privileges (at minimum you get a neat stock certificate and an invitation to the annual meeting), being an owner doesn't necessarily pay. Sure, you make money if the stock goes up, but only if you sell, and you can, in theory, lose all the value of your investment if the stock tanks.
Enter the dividend. Here, you get money simply from holding the stock. Companies pay a yield, which is expressed in a percentage based on the stock's price. For example, if a stock trades at $10, and pays a 10% annual yield, your dividend payment would be a $1. (Usually, companies break out the payments quarterly, so, using our example, you¿d get, well, a quarter each quarter.)
Companies that pay dividends fall into a few categories. First, you've got your big, stable companies that generate enough cash that it makes sense to throw some back to shareholders. Next, there are businesses, like real estate investment trusts, that are in the business of sitting back and receiving cash, then distributing it to holders. And, then there are companies that need to dangle a high dividend yield like a carrot to ease investor fears. Cigarette-maker Altria has been doing this for years.
Simply because a company pays a dividend doesn't make it a good investment. After all, you may want to take a chance on a growth stock that can move higher in price than dividend payers are known to do. But, you can¿t beat the safety of knowing that, even if a stock doesn't move in a year, you¿re at least making something off your investment.
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Thursday, July 03, 2008
California Pharmacies Expect Disaster after Loss in Lawsuit Loss to Stop the 10 Percent Medi-Cal Provider Cuts
Comtex
SACRAMENTO, Calif., Jul 03, 2008 (BUSINESS WIRE) ----Today, a state court denied eight retail pharmacies' motion to stop the ten percent Medi-Cal provider cuts. The pharmacies sought a temporary restraining order (TRO) from Sacramento Superior Court against the California Department of Health Care Services and its director Sandra Shewry to block the cuts from being implemented. The court sided with the Department of Health Care Services (DHCS) finding that the pharmacies had not demonstrated that DHCS had to obtain federal approval prior to implementing the cuts. The court also found that the risk of harm presented by the pharmacies was speculative. Specifically, the court found that:
1.) Only a select number of branded drugs would be reimbursed below cost;
2.) That it was speculative that the rate cuts would result in pharmacies operating at a loss; and
3.) That the risk of loss of services to Medi-Cal beneficiaries overall was speculative. That is, the court determined it was speculative that the pharmacies would close, lay off workers, reduce hours and refuse to fill prescriptions.
"We are sorely disappointed with the outcome of this lawsuit," said Lynn Rolston, chief executive officer of the California Pharmacists Association. "However, the fight is far from over. There are two other lawsuits pending in federal court and we are confident that we have a strong case to stop the ten percent provider cuts. Unfortunately, for now, the cuts will be implemented as scheduled, which could result in tragic consequences for pharmacies and the patients they serve."
A recent report showed that if the ten percent Medi-Cal provider cuts are implemented, pharmacies will be faced with tough decisions including turning away new Medi-Cal beneficiaries, dropping Medi-Cal altogether or going out of business. Smaller and rural pharmacies will be hardest hit, forcing other pharmacies to pick up a larger portion of the Medi-Cal population, which they may not be prepared to do. As part of the domino effect, these other pharmacies will feel the strain and might cope with reduced revenue in other ways, such as cutting staff and hours, which would mean longer lines and slower service for everyone.
The eight pharmacies, including Farmacia Remedios, Inc., Ross Valley Pharmacy, South Sacramento Pharmacy, Horton and Converse Pharmacies, Zweber Apothecary, Komoto Pharmacy and Medical Pharmacy, Pucci's Leader Pharmacy and Gregg's Pharmacy vowed to continue the fight to seek a preliminary and permanent injunction against the ten percent Medi-Cal provider cuts.
SOURCE: California Pharmacists Association
for California Pharmacists Association Bill Bradley, 916-658-0144 bill@perrycom.com
Copyright Business Wire 2008
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