Despite Settlement, J&J Dividend Going Strong

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Shares ofJohnson & Johnson ( JNJ ) are near record highs, even after the company's reputation took a blow.

The U.S. Justice Department announced Nov. 4 a settlement of more than $2.2 billion with the company to resolve criminal and civil charges of illegal marketing of medications.

J&J's Janssen Pharmaceuticals subsidiary pleaded guilty to promoting the antipsychotic drug Risperdal for unapproved uses. The settlement, which involved other drugs, also imposed a Corporate Integrity Agreement "designed to increase accountability and transparency and prevent future fraud and abuse," the Justice Department said.

J&J said the settlement was "previously accrued" and it will not result in an additional charge to earnings.

Johnson & Johnson -- which also makes Tylenol, Band-Aid, diagnostic devices and other health care products -- has a solid dividend.

It pays 66 cents a share each quarter, good for an annualized yield of nearly 3%. J&J is part of the S&P 500 Dividend Aristocrats, an index of companies that have increased payouts for at least 25 straight years.

In its latest quarterly results, announced Oct. 15, J&J earned $1.36 a share, up 9% and above estimates. Sales rose 3% to $17.58 billion, also above views.

The pharmaceutical business led the quarter's growth, up 10%.

Some new drugs are exceeding high expectations. Sales of prostate-cancer drug Zytiga surged 75% year over year to $464 million. The immunology drugs Simponi and Stelara grew 47% and 29%, respectively. But the medical devices and diagnostics division shed 2%.

The stock is forming a base with a possible buy point at 94.52. In January, J&J shares climbed above the 72 price level -- only the second time since September 2008.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

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