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October 9, 1998     Cape Gazette
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October 9, 1998

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CAPE GAZETTE, Friday, October 9- October 15, 1998 - 49 Sussex officials hear about the millenium bug rice computers and more than 25 billion mi- Some will ma change smoothly, fiction thriller. But whatever the name, the Nationally broadcaast .ocu0000s that control a huge variety of com- problem is quite real and quite serious and seminar at Del Tech says we can beat bug By Jim Cresson Twenty years ago, computers led Ameri- ca to the forefront of what became known as the Age of Information. On Saturday, Jan.l, 2000, those same computers may well push civilization backward into what is already being called an Electronic Ice Age. The problem is that many mainframe of- munication and industrial devices and sys- tems are not programmed to deal with the year 2000 as a date. Most of the nation's date-sensitive com- puters and microchips store dates that are recorded with the last two digits of a year. When Jan. 1, 2000 rolls around, however, the computers won't know the difference between Jan. 1, 2000 and Jan. 1, 1900, and even the nation's top computer experts are fearful of what may result when that fateful hour arrives. Nobody is sure exactly how computers or the billions of microchip-con- trolled devices and systems will react. Boines Beach Homes buil{ts on they operate separately as an inde- pendent business. Dan Boines said although they are devoted full time to their own operation, his business also works in conjunction with Century 21 to "offer land and home packages. "We are surrounded in an envi- ronment with professional people who share our enthusiasm," he said. The Boines said they are proud to feature the Apex Homes prod- uct line, along with their business- es' already successful line that in- cludes Shawnee Homes. Boines Beach Homes added Apex to its offerings a year ago. What Apex is all about Based in Middleburg, Penn., By Jen Ellingsworth Using relatively new, system- built technology that blends ele- ments of modular construction with panelized and stick built con- struction, Boines Beach Homes Inc. aims to give its customers the best home on the market for a fair price. But what the local company, sit- uated in the Century 21 Mann & MoOre Associates Inc. building on Route 1 really builds its reputation -on is a solid foundation of quality, customer service and attention o detail. The husband-and-wife team of Dale and Dan Boines, who togeth- er offer engineering, design and pricing, and sales representative Neal Morris, are Boines Beach while others will Iehave erratically or even stop working. VirtUally anything and every- thing that relies n microchips will be af- fected. Mass tra,sit systems, air-traffic- control systems, lephone switches, traffic lights, electric uti ity substations, cash reg- isters, elevators among the thous trolled functions stop or behave world could chan Call it the Ye Y2K problem ant glitch; call it th, md electronic doors are ands of microchip-con- that can be expected to rratically. In short, the e, literally, overnight. lr 2000 problem, or the it sounds like a technical Millenium Bug and it sounds like an eIld-of-the-world science standard 9f quality, one that demands action now. The 'Bug' Can Be Beaten Help is here, it was learned Wednesday during a nationally broadcast seminar called "Y2K & You," originating from Washington, D.C. and downloaded to more than 300 sites, including one at Del Tech's Higher Education Building on the Jack Owens Campus in Georgetown. More than 150 computer operators and owners from county, state and local govern- ments and local industry showed up to hear Continued on page 50 customer service Homes. Apex Homes is a modular housing don E IIingsworth photo Although all three individuals producer 1hat combines the tech- Dan and Dale Boines are sh inside an Apex house at 308 Dutch Road in Rehoboth Beach. are Century 21 real estate agents, Continued on page 51 The house is owned by Hank axd Sally Kadel. / Should income stoc]00:s have a place in your portfolio? When you think of investing for - income, your first thought may be of bonds: Certain types of equi- ,ties, however, also offer income and may provide a suitable alter- native for some investors. While most bonds offer a fixed income, or payments that stay the same throughout the term of the bond, the dividends paid on high-yield- ing stocks may increase or de- crease over time. The capital growth vs. income tradeoff. When deciding whether to include income stocks in the equity portion of your portfolio, it is important to consider whether you primary goal is capital is cap- ital appreciation or income. The capital appreciation poten- tial of high-yield stocks generally lags behind growth stocks, while the income potential is usually greater. With high-yield stocks, capital appreciation is not the pri- mary contributor to total return. This is because the majority of a high-yield company's earnings are paid out in the form of divi- FINANCIAL FOCUS dends, rather than invested back into the company for internal growth. Therefore, earnings and compa- ny profitability are very important factors in choosing income stocks. Generally, higher earnings and cash flow result in higher divi- dends. In addition, if earnings growth exceeds the inflation rate by two or more percentage points on a yearly basis, the income from future dividends has the potential to be quite satisfactory. In other words, on a total return basis, an investment in a high-yield stock may be very attractive. Types of income stocks The following types of stocks may be worth considering if you are seeking income. Regulated utilities. State boards determine the rates that gas companies and electric utilities may charge their customers. Be- cause of these regulations, the companies have little flexibility and little opportunity for earnings growth. Therefore, the value of the stock lies in its yield, which is usually higher than that of most nonutility stocks. ,. Real estate investment trusts (REITs). A REIT combines the capital of many investors to ac- quire or provide financing for real estate, To avoid corporate level taxation, REITs are required to distribute at least 95 percent of net income to investors in the form of dividends. Closed-end bond funds. Closed-end funds are regulated in- vestment companies that provide the same important advantages as mutual, or open-end funds, such as diversification and professional management, However, the com- mon shares of a closed-end bond fund trade like stocks on an ex- change, at a price that may be higher or lower than the market value of the fund's assets per share - the net asset value. Factors to consider In selecting a high-yield stock, the company's finan6ial strength is a key factor. Income-oriented investors seek stability and pre- dictability in the dividend. An excellent way to gauge fi- nancial strength is to ask your fi- nancial advisor for the company's Standard & Poor's (S&P) .rating. It is generally not advisable to choose a high-yield stock with a rating below B+. The dividend payout ratio, which measures the percentage of earnings that is paid out to com- mon .shareholders in dividends, is another factor to consider. The dividend payout ratio is found by dividing the company's annual dividends by its earnings per share. As a hypothetical example, as- sume that XYZ corporation pays a $1 annual dividend and has earn- ings of $3.08 per share. The divi- dend pay, out ratio in this case would be 32.5 percent, or $1 an- nual dividend divided by $3.08 earnings per share. Generally, with a low payout ratio, there is the possibility that a deterioration in earnings could cause the com- pany to lower its dividend. There is one exception: utilities general- ly have had high payout ratios but dependable earnings and divi- dends because of regulation. Bruce Chilcoat is an account executive in investments with Dean Witter Reynolds, Inc., Re- hoboth Beach. He can be reached at 226-5200.