AIG Unloads Wealth Management Business American International Group ( AIG) just announced a deal to sell its wealth management arm AIG Private Bank Ltd. to Aabar Investments PJSC of Abu Dhabi. Terms of the deal were not disclosed. The AIG Private Bank will conduct business under a new name, and its headquarters will be in Switzerland. AIG says that the bank's senior management is expected to remain with the bank. The sale comes as part of the company's promise to sell off a number of business units to pay off a $85 billion government loan. It appears the company will attempt to get back to its focus on U.S. property and casualty and foreign general insurance businesses. We'll track the progress of the sales, but it will be interesting to see if the assets get sold at prices that can keep the company afloat. We would look elsewhere for better investment opportunities. American International Group is not recommended at this time, holding a Dividend.com Rating of 1.5 out of 5 stars. Dow Chemical Completes Kuwait Deal; Rohm & Haas Deal Next Dow Chemical ( DOW) just announced it has finalized a joint venture agreement to form K-Dow Petrochemicals, which will market plastics and other related products. The combination of Dow and Petrochemical Industries Co., a subsidiary of Kuwat Petroleum, is expected to generate annual sales of about $15 billion. The closing of this deal comes right Dow Chemical's $15.3 billion buyout of Rohm & Haas ( ROH), which it hopes will help it grow into the high-margin specialty chemicals market.
We had removed shares of Dow Chemical from our "Recommended" list back on Sept. 29, when the shares were trading at $33.97. The company has a 9.06% dividend yield, based on Friday's closing stock price of $18.55. We are cautious on the company's ability to continue paying it currently large dividend payout. A dividend cut would not surprise us, and that would actually be a better thing for the company long-term, as its debt load will increase significantly with the closure of the Rohn & Haas deal. We'd continue to look elsewhere for better investment opportunities. Dow Chemical is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars. Johnson & Johnson's Pays a Nearly 100% Premium for Breast Implant Maker Johnson & Johnson ( JOHNSON & JOHNSON) has just announced a deal to acquire breast implant maker Mentor ( MNT) for $1.07 billion or $31 a share in cash. Mentor posted $373 million in sales in its most recent fiscal year. The acquisition would give Johnson & Johnson a larger presence in the market for aesthetics products. We had removed shares of Johnson & Johnson from our "Recommended" list on Nov. 12, when the shares traded at $59.55. The company has a 2.83% dividend yield, based on Friday's closing stock price of $58.58. We are surprised that Johnson & Johnson paid as high as a premium it did for Mentor. In an environment where we are seeing few acquisitions, the nearly 100% premium seems too aggressive. Also, the economy is not exactly buzzing at the moment, so breast implants are likely not at the top of a consumers' priority list. Johnson & Johnson is an aggressive acquirer, and the dealmaking will likely continue. We just don't know if there is a need to be overly aggressive in the purchase price.
Johnson & Johnson is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars. UnitedHealth Sees a Steady 2009 UnitedHealth Group ( UNH) just reaffirmed its guidance for the rest of 2008 and 2009 this morning. Ahead of its annual investor conference tomorrow, the company expects earnings per share between $2.95 and $2.98 for 2008 and EPS of $2.90-$3.15 for 2009. The company sees revenue coming in between $85 billion and $86 billion in 2009, slightly above consensus estimates of $84.24 billion. We have avoided shares of UnitedHealth Group since our June coverage began and the shares were trading at $33.01. The company has a low dividend yield of 0.14%, based on Friday's closing stock price of $21.01. We will be waiting to hear if President-Elect Barack Obama has any health care initiatives planned that may possibly derail the profit outlook for the HMO sector. We are still avoiding the shares here until we get a better sense of what happens with the new administration. UnitedHealth Group is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.