Back to Main

Johnson & Johnson Rolls Out New Products, Dividends

By: Investor's Business Daily
Posted: 3/14/2014 5:16:00 PM
Referenced Stocks: MCD;JNJ

LikeMcDonald's ( MCD ),Johnson & Johnson ( JNJ ) is a household name that offers steady profit growth, making it a classic dividend play for income investors.

The fellow S&P 500 Dividend Aristocrat's wide range of consumer brands include Aveeno, Band-Aid, Tylenol and Splenda. But medical devices, diagnostic equipment and pharmaceuticals account for the bulk of its revenue.

J&J may be a 128-year-old company, but it continues to innovate and stay on top of advancements in medical technology.

On Tuesday, biotech startup Alector announced a partnership with J&J's Janssen Pharmaceuticals unit to research and develop treatments for Alzheimer's disease.

Earlier this month, the European Commission granted conditional approval to J&J's Sirturo to help treat multidrug-resistant tuberculosis in adults.

And last month, J&J's Biosense Webster unit won FDA approval for its ThermoCool SmartTouch catheter, which helps doctors treat atrial fibrillation by measuring contact force applied to the heart wall during catheter ablation procedures.

The New Brunswick, N.J.-based company has delivered payouts to shareholders for 51 consecutive years and has grown adjusted earnings for 30 years. Analysts expect it to extend that streak with a 6% increase in per-share earnings this year and 8% in 2015.

The steady track record helps J&J land a three-year and five-year Earnings Stability Factor of 1, on a scale of 0 to 99. The lower the number, the more stable the profit.

J&J paid out a dividend of 64 cents a share for the first quarter, or $2.64 on an annual basis. That works out to a yield of 2.8%, above the S&P 500's average 1.9% payout.

The stock appears to be in consolidation mode after last year's 31% advance, slightly ahead of the S&P 500 and the Dow industrial's 30% and 27% respective gains. It's 3% off its Nov. 25 intraday high of 95.99.