Johnson & Johnson (NYSE:JNJ), together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices & Diagnostics. This dividend king has paid dividends since 1944. Dividend increases have been like clockwork every year for decades. Check my analysis of Johnson & Johnson (JNJ) for more information about the company.
Q1 2022 hedge fund letters, conferences and more
Johnson & Johnson Raises Dividends
I just read that Johnson & Johnson (JNJ) has hiked dividends by 6.60% to $1.13/share. This marked the 60th consecutive annual dividend increase for this dividend king. There are only 38 companies in the US which have managed to increase dividends annually for at least 50 years in a row.
Over the past decade, Johnson & Johnson has managed to grow dividends at an annualized rate of 6.40%/year.
When reviewing press releases that discuss dividend increases, I always find it helpful to see the tone from top management. I especially liked what the CEO had to say (Source: Press Release):
"In recognition of our 2021 results, strong financial position, and confidence in the future of Johnson & Johnson, the Board of Directors has voted to increase the quarterly dividend for the 60th consecutive year," said Joaquin Duato, Chief Executive Officer of the company.
This dividend increase is a testament to the stability of the business model. Johnson & Johnson was one of the first companies to raise dividends in April 2020, amidst the uncertainty of the Covid-19 pandemic. It has also delivered during the last few crises, such as during the Global Financial Crisis of 2007 - 2009. When other companies cite current conditions as unprecedented, Johnson & Johnson actually can provide guidance on revenues and earnings. It is always reassuring to understand that long term fundamentals remain intact, no matter what life throws at this business.
The company expects to earn somewhere between $10.15 and $10.35/share in 2022.
The valuation seems fine today at 16.90 times forward earnings, albeit it would always be better if the stock is available at a lower price. The stock yields 2.45%.
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