Suredividend Blog | Johnson & Johnson: A Dividend King With Long-Lasting Growth Potential | Talkmarkets
High Quality Dividend Stocks, Long-Term Plan
Contributor's Links: Sure Dividend

Sure Dividend finds high quality dividend growth stocks for long-term investors with The 8 Rules of Dividend Investing.

Click here to join the Sure Dividend Newsletter and benefit from ... more

Johnson & Johnson: A Dividend King With Long-Lasting Growth Potential

Date: Thursday, June 6, 2019 8:13 PM EDT

Healthcare giant Johnson & Johnson (JNJ) is an industry-leading company with significant competitive advantages, that have fueled its impressive growth over the past several decades. Johnson & Johnson is a member of the Dividend Kings, a group of just 26 companies that have raised their dividends for at least 50 years in a row.

Johnson & Johnson has a long history of dividend growth and a high yield of nearly 3%. These qualities are the reasons Johnson & Johnson stock is a top pick for long-term dividend growth.

Recent Events And Future Growth

Johnson & Johnson will remain a dividend growth company because of its strong business model. The company is diversified across medical devices, pharmaceuticals, and consumer health products. It has a leading market share in each category and generates billions of sales from all segments.

Overall, Johnson & Johnson grew organic sales by 6% in 2018, while adjusted EPS increased 12% for the year. The company has continued to generate growth in 2019. In the 2019 first quarter, the company grew EPS by 2%, and beat analyst expectations for the quarter.

The company’s pharmaceutical products will represent its major growth catalyst in the years ahead. Pharmaceutical segment revenue increased 12% in 2018, thanks to 25% growth in oncology revenue and 10% growth in immunology. These represent the two growth areas of 2019 and beyond. Pharmaceutical revenue grew 4.1% to $10.2 billion in the most recent quarter, on the strength of 7% Immunology growth and 9% oncology growth.

Continued growth in the pharmaceutical segment, along with steady increases in medical device and consumer product sales, will allow Johnson & Johnson to continue growing earnings. In turn, this will provide the company with the ability to continue raising its dividend each year, as it has done for over five decades.

A Premier Dividend Growth Stock

Johnson & Johnson reiterated its revenue guidance of $80.4 billion to $81.2 billion but tightened its earnings-per-share expectations to range of $8.53 to $8.63. The midpoint for earnings-per-share guidance remains unchanged at $8.58. Still, this easily covers the company’s dividend payments. With a dividend payout ratio of 42% for 2019, the dividend should continue to be increased each year for many years to come.

1 2
View single page >> |
Disclaimer: This and other personal blog posts are not reviewed, monitored or endorsed by TalkMarkets. The content is solely the view of the author and TalkMarkets is not responsible for the content of this post in any way. Our curated content which is handpicked by our editorial team may be viewed here.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.