Johnson & Johnson Is the King of Dividend Safety

Johnson & Johnson (JNJ 0.51%) Arguably one of the safest dividend stocks in the world. The healthcare giant generates durable cash flow and has a balance sheet like a fortress.. These features are 3.4% dividend yield In ~ A solid foundation.

Here’s why: People looking for a bankable source of income Invest in Johnson & Johnson.

Backed by the full faith and credit of Johnson & Johnson

Johnson & Johnson is one of only two companies in the world with AAA. bond rating From more than one credit reporting agency; microsoft Here’s the other one. It’s better than the US federal government, which only has one AAA rating. left. This means that the company’s credit rating is excellent. extremely strong Ability to meet financial obligations.

The company boasts a strong balance sheet. 1st quarter is over It has $26 billion in cash and marketable securities against $34 billion in debt. Johnson & Johnson, with net debt of just $7 billion extremely low leverage ratio. Last year, the company generated $18 billion in free cash flow, enough to more than double its net debt.

Johnson & Johnson’s strong free cash flow is another factor driving the overall safety of its dividend. The company generated $18 billion in excess cash after investing $15.1 billion last year. Research and Development (R&D), easily It covers dividend expenses of $11.8 billion. This allowed the healthcare giant to strengthen its already elite balance sheet while also returning additional funds to shareholders by repurchasing $2.5 billion in stock.

Top Balance Sheets of Healthcare Companies Gives flexibility We make acquisitions to fill gaps in our drug pipeline and strengthen our medtech sector. This year we did both. agreed to purchase shock wave medical Freed up $13.1 billion in cash to accelerate sales growth. The company also signed a $2 billion deal with Ambrx Biopharma to strengthen its drug pipeline.

king of dividend stocks

Johnson & Johnson’s strong financial foundation has enabled it to pay a sustainable, growing dividend. It became the 62nd company to raise its dividend by 4.2% earlier this year. upright This is the year to increase your payments. That’s what kept it elite group dividend kingThis is a company that has achieved dividend growth for over 50 consecutive years.

The company has achieved mid-single-digit annual dividend growth very consistently over the past decade.

JNJ dividend data from YCharts

Another great feature of Johnson & Johnson is its high dividend yield. The recent level of 3.4% is more than double. S&P 500The current dividend yield is 1.4%. At this rate, Johnson & Johnson will generate about $34 in annual dividend income for every $1,000 invested in the stock. This compares to $14 in dividend income for investing $1,000 in an S&P 500 index fund. Investors can expect to receive dividends from the company every year, and there’s a very good chance that payout levels will continue to rise in the mid-single digits annually.

The company’s long-term forecasts drive that view. Johnson & Johnson projects operating revenue growth of 5% to 7% annually through 2030. This should drive adjusted earnings per share from operations above 7% per year at the midpoint of the guidance range. The company expects organic growth and R&D investments to help drive revenue growth, which it can supplement through active acquisitions.

bankable sources of income

Johnson & Johnson has one of the healthiest balance sheets in the world. Combined with strong and durable free cash flow, the company pays one of the safest dividends in the world. Meanwhile, it has the financial flexibility to continue investing in R&D and drive earnings and dividend growth through acquisitions. These characteristics make Johnson & Johnson one of the best stocks for those who want a very safe dividend.