Exotic Foods

Corporate bigwigs American Express,

International Business Machines,

and PepsiCo

all enriched their dividends last week.

For American Express (ticker: AXP), it was a matter of making official its intention, disclosed in March, to raise its payout. It will disburse 23 cents a share quarterly, up 15% from 20 cents. When the travel and financial-services giant hiked its dividend by two cents in March 2012, it marked the first increase since November 2007.

American Express stock, a Dow Jones industrial component, set a 52-week high Friday above $71, so it now yields a modest 1.3%. Dividends have been paid without interruption since 1870. The new payout will put an additional $132 million in investors’ accounts annually. The company is moving ahead with plans to repurchase enough common shares to return up to $3.2 billion to holders during the rest of 2013 and another $1 billion in 2014′s first quarter.

In announcing a 2% advance last month in first-quarter net over the year-earlier total on a 4% revenue gain, CEO Kenneth Chenault said that the company is off to “a strong start in 2013, thanks to our ability to grow revenue in a slow-growth economy, control expenses, and maintain a strong balance sheet.”

For its part, IBM (IBM) enhanced its quarterly dividend for the 18th year in a row, raising it 12%, to 95 cents a common share from 85 cents, which is worth an extra $443.5 million to stockholders annually. This is the 10th consecutive year of double-digit boosts, and Big Blue has increased its payout by more than 600% since the start of 2000. Continuous dividends date back to 1916.

IBM also added $5 billion to its stock-repurchase program. That’s atop the $6.2 billion remaining at the end of March from a prior authorization, and directors will consider upping the buyback ante again when they meet in October. The Armonk, N.Y., company has cut its share count by one-third over the past 13 years. Since 2000, it has returned more than $150 billion to investors through cash payouts and share repurchases.

The dividend and buyback were welcome news, in contrast to IBM’s report that first-quarter profit had dropped 1% on a 5% revenue decline. The tech giant blamed a disappointing performance by its sales force. Another Dow Jones industrial stock, Big Blue set a 52-week high of $215.90 on March 15. It was recently quoted at about $205, for a 1.9% yield. Barrons.com income-investing editor Michael Aneiro noted in an April 30 blogpost that IBM’s bonds due in August 2022 were yielding 2.314%.

Moody’s Investors Service senior vice president Richard Lane says that IBM’s Aa3 senior unsecured credit rating and stable outlook remain supported by its strengthening business profile, which includes “a growing emphasis on higher-margin software and services businesses (88% of total pretax profit) in lieu of more commoditized hardware offerings.”

PepsiCo (PEP) sweetened its common dividend for the 41st consecutive year, at an additional cost of $185.5 million annually. The new quarterly will be 56.75 cents, up three cents, or 5.6%. Yield: 2.7%. Dividends have been paid since 1952. (Archrival Coca-Cola

[KO] hiked its quarterly in February to 28 cents from 25.5 cents, also for a 2.7% yield.) Since 2002 began, PepsiCo has returned more than $58 billion to stockholders via dividends and share repurchases. This year’s expectation: upward of $6 billion.

Purchase, N.Y.-based PepsiCo earned 69 cents in the first quarter, down from 71 cents. However, excluding the effect of Venezuela’s currency devaluation, commodity hedges, and restructuring charges, the 97-year-old maker of sodas, Tropicana juices, and Frito-Lay snacks, to name a few of its products, earned 77 cents a share, helped in part by price increases. That topped a FactSet analysts’ poll forecasting 70 cents. Revenue also surpassed estimates, growing 1%, to $12.58 billion. PepsiCo set a 52-week high of $84.32 on April 23 (Coke hit a 12-month high of $42.96 the same day).

BEATING WALL STREET’S first-quarter consensus profit estimate by 19 cents a share, for a 52% jump on a 39% sales surge, gun maker Sturm, Ruger

(RGR) announced an increased quarterly common dividend of 49 cents, up from 40.4 cents. The company pays a variable dividend based on the size of its earnings. At its current price of about $51, the stock yields 3.9% with the new payout. 

Coments? E-mail: shirley.lazo@barrons.com

By SEAN GARDINER

Federal prosecutors are poised Monday to make their case that a New York City police officer intended to cross the line between cannibalistic fantasy and reality.

Gilberto Valle, 28 years old, pleaded not guilty in November to one count of conspiracy to commit kidnapping after the government alleged he plotted over several months in 2012 to kidnap women and then rape, cook and eat them.

While none of the alleged plots came to fruition, Mr. Valle faces a prison term of 20 years to life if he is convicted. The Queens man was suspended from the police force after his arrest in October.

Opening statements in the trial, which is in federal court in Manhattan after the FBI initiated the case, are to start Monday.

Pretrial hearings indicate the trial is likely to raise issues of free speech and to usher jurors down unsettling corridors of the Internet, in particular a website known as Darkfetishnet.com that the defense team doesn’t dispute Mr. Valle frequented.

In its criminal complaint, the government alleges Mr. Valle left a trail of graphic emails, chats and photographs that documented cannibalistic desires and intent to act on them. When allegedly asked in one Internet chat, “How big is your oven?” Mr. Valle allegedly responded, “Big enough to fit one of these girls if I folded their legs.”

Mr. Valle’s defense so far has been as straightforward as the allegations against him are twisted.

At several bail and pretrial hearings, defense attorney Julia Gatto has repeatedly asserted that Mr. Valle is a fetishist who may have “deviant” sexual fantasies but never crossed the line into action. “They may be disgusting topics of conversation, we may be offended, but it’s just talk and without more it’s not criminal,” Ms. Gatto said at Mr. Valle’s arraignment in October.

Mr. Valle’s attorneys say they are mounting what is essentially a so-called fantasy defense, a strategy that for Internet-related allegations dates to 1995 in the U.S. That year a 20-year-old University of Michigan student was arrested after posting a story on an Internet bulletin board that his lawyer, Douglas Mullkoff, said “described kidnapping and sexual brutality” involving a female classmate.

The student was arrested on a federal charge of transmitting a threat to kidnap or injure by electronic email. “They were treating his fiction as if it were real,” said Mr. Mullkoff, of Ann Arbor, Mich.

A judge dismissed the case, ruling that while the student’s story was “a rather savage and tasteless piece of fiction,” it was protected free speech.

Audrey Rogers, a professor at Pace Law School, in White Plains, said the “fantasy defense” had been used predominantly by men charged with attempting to have sex with minors after being caught in Internet stings in which police posed as children.

“The defendant will say they were just role-playing, they always knew they were talking to another adult or they never planned to do it,” she said.

Ms. Rogers said the defense was successful in a few cases but that most defendants claiming it have been convicted.

In the Valle case, the judge has granted a defense request to allow Sergey Merenkov to testify via video link from Russia about Darkfetishnet.com, which he founded and operates.

The website is “at the core of Mr. Valle’s case,” wrote Ms. Gatto in court papers, because it is where Mr. Valle “interacted in cyberspace” with a second man charged in the case, Michael Vanhise, and other alleged fetishists.

Mr. Vanhise, 22 years old, of Trenton, N.J., also faces a charge of conspiracy to commit kidnapping, and he has pleaded not guilty. His case is working its way through Manhattan federal court and a trial date hasn’t been set. His attorney, Alice Fontier, said Mr. Vanhise “never planned, intended, or had the ability to carry out any of the crimes alleged by the prosecution.”

In their motion to have Mr. Merenkov testify, the defense team said he told their investigators that his website has more than 37,500 members.

According to the same motion, Mr. Merenkov also will testify that many members post photographs of real people about whom they subsequently express online sexual fantasies. Website members are encouraged to “speak to each other in whatever manner they want and to engage in as realistic sounding role-play as they want,” the court papers contend.

Mr. Merenkov will also testify that no one monitors the chats and that members often exchange personal emails to continue their communications off-site because his website is too slow, the defense papers state.

Mr. Valle’s attorneys have said in court and in court papers that Mr. Merenkov’s testimony will likely prove important to the defense. Prosecutors Randall Jackson and Hadassa Waxman have argued at hearings and in court documents that Mr. Valle’s plots were real—not merely fantasy—because he used photos of women he knew and he attempted to avoid the website’s monitoring system by shifting his conversations to personal email and chat accounts.

Mr. Valle’s defense also plans to call Park Dietz, a California forensic psychiatrist who examined Mr. Valle. Defense attorneys have indicated in court papers that Dr. Dietz would testify that Mr. Valle’s online writings “indicate sexually sadistic sexual fantasies” but that he found no evidence that Mr. Valle suffered from mental illness or displayed signs of personality disorders associated with violence.

Dr. Dietz is set to testify that Mr. Valle’s fetish interests seem to have originated in early adolescence, when he watched the 1994 film “The Mask,” which contains a scene in which a character portrayed by actress Cameron Diaz pretended to be abducted and bound, the court papers state.

Other evidence prosecutors plan to introduce includes a document recovered from Mr. Valle’s computer that court papers, redacting the name of the alleged victim, stated was titled, “Abducting and Cooking (Victim 1).” That document includes her name, date of birth, height, weight and bra size, prosecutors say. Mr. Valle’s attorneys say the document is evidence of fantasy, not a plan to act.

The indictment also lists two “overt acts” allegedly committed by Mr. Valle that prosecutors are set to argue proved steps were taken to carry out the kidnapping plots.

On July 22, prosecutors allege, Mr. Valle traveled to Maryland and met for lunch a female friend from college about whom—in messages with Mr. Vanhise—he had discussed kidnapping and cooking.

Ms. Gatto told The Wall Street Journal the defense isn’t disputing that Mr. Valle participated in electronic communications in which that friend is named, but that it was only an element of his fantasies—and that he brought his wife and baby to the lunch.

Mr. Valle’s now-estranged wife couldn’t be reached for comment. According to defense and prosecution papers filed in the case, Mr. Valle’s wife contacted authorities after discovering Mr. Valle’s communications on his computer and is staying with her family in Nevada.

On May 31, Mr. Valle allegedly accessed the federal National Crime Information Center database without authorization to obtain information about a woman whom authorities say they matched to a file on Mr. Valle’s computer containing the names and information of more than 100 women. Mr. Valle has pleaded not guilty to a charge of accessing that computer database without authorization.

Prosecutors also want to have an FBI agent testify to his analysis of Mr. Valle’s cellphone-data records, which prosecutors say show Mr. Valle placed calls that were routed through cell towers near some of the homes or workplaces of victims they alleged he was stalking.

The defense is disputing the agent’s analysis, saying the cellphone calls can be initially routed through cell towers blocks or even miles away.

U.S. District Court Judge Paul Gardephe has scheduled a hearing Monday morning—before opening statements begin—to determine if he will allow the agent to testify.

Corrections & Amplifications

The officer on trial is Gilberto Valle. An earlier version of this article referred to him as Gilbert Valle.

Write to Sean Gardiner at sean.gardiner@wsj.com

A version of this article appeared February 25, 2013, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: ‘Fantasy Defense’ in Trial.

By DAWN WOTAPKA

High-end retirement communities aim at a new generation of retirees who don’t think of themselves as old. Dawn Wotapka reports. Photo: Dawn Kish.

At Vivante on the Coast, a $62 million retirement community under construction in Newport Beach, Calif., renters will be able to relax in a hydromassage room or take a dip in the indoor saltwater pool. They’ll watch movies in a private theater and sip wine from Napa Valley’s finest vineyards. And when they’re hungry, a sushi chef will be on standby.

The Vivante is the newest generation of residential housing catering to retirees who demand far more than the old-school retirement homes with bland food and drab décor. Today’s facilities boast full-size gyms, chefs trained at top cooking schools, professionally decorated interiors and an activity list that would exhaust even a teenager.

“In my day, you counted on somebody taking care of your grandmother or grandfather until they went into a nursing home,” said Bill Bergman, a retired president of the company that made Vicks VapoRub, which is now owned by Procter & Gamble

. “I never dreamed that people lived like this.” Mr. Bergman, 81, lives at the Vi at Silverstone in Scottsdale, Ariz., where he and his wife, Donna, paid just under $1 million for a 2,500-square-foot villa.

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Rentals and sales at many retirement communities fell after the housing bust. And while the market is still below its 2005 peak, things are picking up. The National Association of Home Builders, a trade group, expects home sales in single-family communities catering to those 55 and older to increase by nearly a quarter this year, on top of 2012′s 21% climb. PulteGroup,

one of the nation’s largest home builders, said sales at its senior-focused Del Webb communities spiked nearly 40% late last year from the previous year.

Developers are also rushing to build more units and new communities to cash in on baby boomers as they hit retirement age. By 2020, the share of U.S. households over 55 years old could hit 46.6%, up from 42% in 2012, according to the NAHB.

This group tends to embrace an active retirement, with many boomers planning a move to age-focused communities while they can still enjoy themselves instead of waiting until it is medically necessary. “They’re going to be a very demanding group,” said Donna Herbst, a regional director with Atria Senior Living, a Louisville, Ky.-based chain of nearly 130 senior communities nationwide.

Today’s 55-and-older communities boast everything from entertainment areas with videogames and computers to state-of-the-art gyms with personal trainers and activities like age-modified Zumba and belly-dancing classes. Some have dog parks so that beloved pets have a place for themselves. Mr. Bergman said Heidi, his 12-year-old miniature wire-haired dachshund, is “very happy” with her living situation at the Vi.

“They’re residents of ours as well,” said Phill Barklow, Vivante’s vice president of operations, of the pets. “They’re family members. To say…you can’t have your family member with you, that’s not fair.”

Residents eat well, with some staff chefs on call to whip up anything at most any hour. Menu items at the Atria’s West 86 community on Manhattan’s Upper West Side include a Belgian endive salad with micro greens and teardrop tomatoes, and sesame-seared tuna with baby bok choy. Chefs also offer the classics: steak, chicken and salmon.

“Most people’s perception of senior living is that senior-living food is similar to cafeteria-type dining,” said Robert Scarmato, culinary-services director at Atria’s West 86. “We’re trying to give four-star-restaurant quality.” Atria also offers entrees that comply with diets restricted for fat, sugar or sodium.

Of course, living the golden good life doesn’t come cheap. At the Vivante in California, where units will include Caesarstone countertops and Grohe faucets and fixtures, monthly rents will range from $3,990 for a studio to $11,000 for a two-bedroom and include meals, Internet and local transportation. Residents will also receive an iPad they can use to see daily menus, schedule activities and submit maintenance requests. At the West 86 community, rents for two-bedroom units can top $10,000.

This high cost can quickly weigh on finances, as Dennis Sullivan is learning. After a series of falls two years ago, Mr. Sullivan, a 71-year-old former television-news producer, moved to West 86. His rent for a 373-square-foot studio apartment is about $5,000 a month, plus $300 a month to have his medicines managed and dispensed each day. “My accountant is telling me I should be spending $1,000 less a month for rent,” he said. “It’s costly to live here, and that’s a problem.”

Most senior communities have homes for sale or rent. But for those who can part with a significant amount of money at once, facilities known as continuing-care retirement communities, or CCRCs, require a steep upfront payment in exchange for a home and care until the resident’s death. (In some cases, a portion of the move-in fee is refunded to heirs.) Residents also typically pay a monthly fee.

The Vi at Silverstone in Arizona is a CCRC, where Arch Rambeau and his wife Laree, both 77, paid a $650,000 move-in fee late last year to “buy into” the community. They paid a lower fee with the understanding that a portion would not be refunded to their heirs. The Rambeaus also pay a monthly fee of more than $6,000. “We no longer have any maintenance responsibility. If a light burns out, they come and replace the light,” said Mr. Rambeau, a former General Dynamics senior vice president who lives in a private villa with a two-car garage. “It’s like we decided to go live at the Hyatt in Orlando, Fla., or some place and decided to just live there the rest of our lives.”

The Vi at Silverstone has different types of housing—traditional single-family homes (known as villas), assisted-living residences and a skilled nursing home—to serve residents as their needs change. Before moving there, Mr. Rambeau said he researched everything from his community’s actuarial projections to several years of balance-sheet statements before he felt comfortable enough to buy in. He said his CPA and attorney examined the same information.

CCRCs, which grew in popularity during the housing boom, are considered risky by some seniors. In rare cases, some residents have seen reductions in services or lost their upfront payments when the developer encountered financial problems.

Alternatively, active-adult communities don’t require the upfront payments to cover a lifetime of care. These developments are typically composed of traditional, single-family residences, condos or townhomes, albeit ones without children. “We wanted some protection from teenage kids, souped-up cars,” said Jim Holdread, a retired insurance marketing manager who moved into an active-adult home in Orlando late last year.

Many of the homes include master suites on the first floor to help owners avoid stairs, and landscaping, lawn maintenance and snow removal is usually included in the monthly maintenance fee. Advanced medical services are not generally included. Toll Brothers

said its buyers want plenty of storage space to accommodate a lifetime of furniture and mementos, said Tim Gehman, the company’s director of design.

The highlight of many of these communities is the amenity-filled clubhouse. Developers typically spend millions of dollars erecting a showpiece filled with everything from arts-and-crafts rooms—some with a kiln—to industrial kitchens to cater large parties. At Toll’s Regency at Monroe community in New Jersey, the 40,000-square-foot clubhouse includes a tennis pavilion, a billiards room and a fitness center. As with many communities, there’s a “lifestyle director” on staff. Clubhouses are “expensive, but if you don’t have that clubhouse, you’re not going to get any buyers” looking for that lifestyle, Mr. Gehman said. Base prices at Regency range from the low $400,000s to nearly $550,000.

These centers serve as a social hub for residents, who drive to them in golf carts in some locations. At Meadowbrook Pointe on New York’s Long Island, a former horseracing track is now an active-adult community, where unit prices start at $525,000 and can top $1 million. At the clubhouse, residents can watch games on 17 televisions in the sports bar, play cards in one of two rooms or catch a movie in the 36-seat theater. “One of the problems I have is people come here and act like teenagers,” joked Michael Dubb, chief executive of the developer, Beechwood Organization. “A little too much partying, late hours.”

Write to Dawn Wotapka at dawn.wotapka@dowjones.com

A version of this article appeared March 29, 2013, on page M1 in the U.S. edition of The Wall Street Journal, with the headline: A NEW SENIOR MOMENT.