Photo: Freeimages.com/Michelle Morales

About Owens & Minor Inc.

Owens & Minor is a logistics provider focusing on serving the healthcare industry. The company provides logistics and inventory management services, and supplies products for healthcare providers and manufacturers of healthcare products. The company is headquartered in Richmond, VA and employs 7,800 people in the United States and Europe.

Owens & Minor was founded in 1882 as a drug wholesaler and incorporated in 1926. In the 1960s, the company expanded into medical devices and equipment. Owens & Minor divides its operations into two geographic business segments: the Domestic and the International. The segments are similar – Owens & Minor has agreements with nearly 1,900 suppliers from which it sources medical supplies. The company also has a proprietary brand, MediChoice, which it offers to customers through its 68 distribution centers, two-thirds of which are in the United States. Owens & Minor has 2 packaging centers in the United States and 1 in Europe that it uses to produce surgical kit trays. With a wide geographical dispersion in distribution centers, the company prides itself on being able to customize delivery schedules to the needs of its customers.

Internationally, Owens & Minor sells products and provides services to customers in over 90 countries and has operations in 12 European countries: Belgium, the Czech Republic, Denmark, France, Germany, Ireland, The Netherlands, Portugal, Slovakia, Spain, Switzerland, and the United Kingdom. The vast majority of the company’s revenues come from the Domestic Segment – only 5% of the company’s net revenues came from the International Segment.

As a player in the healthcare industry, Owens & Minor is subject to effects from the trends that are occurring in the industry. One of those is the consolidation and merging of healthcare companies, which presents a risk for Owens & Minor. Over a quarter of Owens & Minor’s revenues come from products supplied by two companies: Covidien and Johnson & Johnson Health Care Systems. More than 50% of product sales are to group purchasing organizations, specifically Novation, LLC; MedAssets, Inc.; Premier, Inc.; and HealthTrust Purchasing Group. Product sales are made under 3 to 5 year contracts to these organizations, and the contracts have 1-year renewal options.

The company is a member of the S&P Mid Cap 400 and Russell 2000 indices and trades under the ticker symbol OMI.

Owens & Minor’s Dividend and Stock Split History

Owens & Minor has paid dividends since at least 1972 and increased them since 1998. The company announces annual dividend increases in mid-February, with the stock going ex-dividend in mid-March.

Owens & Minor has compounded its payout at an average rate of 1.6% over the last 5 years and 6.9% over the last 10 years.

Owens & Minor has split its stock several times since the mid-1970s. Specifically, the company split its stock 5-for-4 in August 1976; 2-for-1 in September 1982; and 3-for-2 in July 1985, May 1988, June 1991, February 1993, and May 1994. The company also issued stock dividends of 50% in June 1975 and February 2010, and 10% in February 1981 and March 1982. Had you purchased shares of Owens & Minor prior to mid-1975, each one would have split into 51.68 shares of stock. Had you purchased shares of the company when Owens & Minor began its run of dividend growth in 1997, you would have received the 50% stock dividend in February 2010.

Owens & Minor’s Direct Purchase and Dividend Reinvestment Plans

Owens & Minor has both direct purchase and dividend reinvestment plans. You don’t need to be a current shareholder to participate in the plans – you can make your initial purchase through the plan. The minimum investment for the initial direct purchase is $200 and $25 for follow-on direct purchases. The dividend reinvestment plan allows for full or partial reinvestment of dividends.

The plans’ fees are favorable for investors. While there is a one-time $10 fee for new enrollees, Owens & Minor picks up all the costs of investing in the company’s stock for both direct purchases and purchases through the reinvestment of dividends. When you sell your shares, you’ll pay a transaction fee of $5 plus a commission of 10 cents per share for batch orders (where you do not control when or at what price the stock is sold). For all other types of sell orders, you’ll pay a transaction fee of $25 plus a commission of 12 cents per share. You’ll also pay an additional $15 if you go through a phone agent to sell your shares. All fees will be deducted from the sales proceeds.

Helpful Links

Owens & Minor Inc.’s Investor Relations Website

Current quote and financial summary for Owens & Minor Inc. (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Owens & Minor Inc.