Dividend Stocks

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>>> Johnson & Johnson -



http://www.kiplinger.com/slideshow/investing/T018-S015-5-safe-dividend-stocks-to-buy-for-retirement/index.html?rid=SYN-yahoo&rpageid=16183&yptr=yahoo



Dividend yield: 2.8%

Johnson & Johnson (JNJ) is one of my personal favorites among retirement-focused dividend stocks, and full disclosure: I own it myself.

JNJ straddles two critical sector of the economy in healthcare and pharmaceuticals. Both in and of themselves also intersect, which brings us to the key point behind JNJ’s longevity, strength, and investment selling point: its Consumer, Pharmaceutical and Medical Devices divisions.

Pharmaceuticals and Medical combine to make up just more than 80% of total revenues, so clearly, healthcare is the biggest driver of JNJ. But having essentially 20% exposure to consumer products buffers Johnson & Johnson from significant economic or sector downturns, including a recent turndown in the medical sector.

A key to JNJ’s longevity, and that of any pharm stock of course, is its pipeline of future medicines and drugs. Here, the company has several late-stage trial drugs, which includes additional indications for already-approved myleoma treatment Imbruvica and heart treatment Xarelto.

Johnson & Johnson’s biggest claim to dividend fame, of course, is its standing as a Dividend Aristocrat, having raised its payout for 54 consecutive years, including a 6.7% bump in 2016.

Free cash flow has been steadily on the rise, including just less than $16 billion in FCF in 2015. Meanwhile, Johnson & Johnson just used $30 billion in cash to buy up Switzerland-based Actelion Ltd, a maker of products for pulmonary arterial hypertension … which means it still has a decent war chest of about $10 billion remaining.

JNJ trades about the same as the broader S&P 500, and offers long-term stability and income. This is a good time to strike.

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