Why Johnson & Johnson is a Solid Long-Term Dividend Stock

Johnson and Johnson

If you want to include some good long-term dividend stocks to your portfolio, then you need to think carefully about in which companies you should invest. This means looking at many aspects of a company’s history, its financial performance, and its potential for growth and profitability in the future. There are some sound options available for long-term investors, and each of these has its own pros and cons. One company that many financial experts consider a solid long-term dividend stock option is Johnson & Johnson (NYSE: JNJ). Here is an overview of this company and the reasons why it is a solid long-term dividend stock option to add to your portfolio.

Stock

Johnson & Johnson have been in business for more than 130 years as the company was founded in 1886. They are now leaders in the pharmaceutical, medical devices, and consumer packaged goods industry. In fact, they are the largest independent biotech company in the world by market cap. This puts this company in a better position than its competitors. Headquartered in New Jersey, Jonson & Johnson is a corporation that includes over 250 subsidiaries. They have operations in 60 countries and their products are sold in 175 countries across the globe. Some of this company’s best-known products include Band-Aid, Tylenol, Johnson’s baby products, Acuvue contact lenses, Clean & Clear facial wash, and the Neutrogena range of skin and beauty products. Each of these is a well-established brand that consumers trust.

There are many reasons why this company is a good long-term investment, not least the size and history of Johnson & Johnson. The fact that the company is so well-established and that they are a trusted brand means that the business is secure. The global reach of the products also supports the security of the company, as even if sales drop in one location, the sales in other areas will support the losses. Similarly, when one country experiences an economic downturn, another is experiencing economic growth. The diversity of the products is a further factor that indicates that this company is a good investment. Companies that manufacture a wide range of products are generally more stable than companies that focus on only a few products or that operate in only one sector. The company will see growth in different sectors at different times, and this covers the aspects of the business that are not doing as well. According to The Motley Fool, Johnson & Johnson is a pretty safe bet for investment. In fact, they have gone so far as to describe the company as one of the safest dividend stocks on the planet.

They say that the current yield of 2.9 percent is one of the leading reasons to consider buying the stock now. However, the company’s payout history is also an important element to take into account. It is in the elite group of companies called dividend kings as they have consistently increased their dividend payouts for 57 consecutive years. Such a good payout history is a sound indicator of the company’s good financial history and is also a sign that the payouts are likely to continue on an upward trend. Therefore, those who invest now can expect to receive growing dividends in the future. The company’s growth is another element of the business that potential investors should consider. The pharmaceutical aspect of the company is one area in which it is experiencing particularly good growth. This is predominantly due to their blood cancer drugs, Imbruvica and Darzalex, which contributed to the company reporting high levels of growth in the second quarter of 2019. The tremendous sales momentum is also being pushed by immunology drugs, such as Tremfya and Stelara.

One element of the pharmaceuticals sector that is playing an important role in the company’s growth right now is research. This is an area into which Johnson & Johnson have invested huge sums of money. This money is being used to develop the research element of the business and this will give the pharmaceutical sector big returns in the future. According to Real Money, research is one of Johnson & Johnson’s biggest competitive advantages. They currently have research facilities across the globe, including facilities in the United States, Germany, Belgium, Israel, Canada, Brazil, Japan, China, the United Kingdom, Switzerland, and the Netherlands.

However, pharmaceuticals are not the only sector of Johnson & Johnson that is currently experiencing growth, although this is currently the aspect of the company that is enjoying the greatest success. Furthermore, Johnson & Johnson are introducing 15 new programs to the company over the next five years, and this should fuel further growth. Sure Dividend has described how emerging markets are an additional area of growth for Johnson & Johnson. They sell products in any developing countries, including countries in Asia, Africa, and the Middle East. These parts of the world have high rates of economic growth, and this makes them ideal for Johnson & Johnson’s expansion. This was evident in 2018 when the company generated 7.7 percent international revenue growth.

Final Thoughts

The areas that are currently the most profitable of the developing economies are Asia and Africa. In 2018, Johnson & Johnson experienced revenue growth of 9.4 percent in these areas, which means these areas outperformed the United States in terms of revenue growth as the United States figures grew at a rate of only 5.1 percent. Overall, the evidence suggests that Johnson & Johnson is a solid long-term dividend stock, and this is something on which financial experts generally agree. The company has a long history, they manufacture products in several sectors, and they sell their products across the globe. Johnson & Johnson is a dividend king with a long history of increasing dividend payouts, which gives investors confidence for the future. Finally, this company is experiencing significant growth, particularly in its research and pharmaceuticals sectors.


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