Easy Extra Money Idea of the Day:
Being a fan of dividend stocks, I tend to stay away from certain stock categories such as healthcare because their payouts are usually low (if any) and can be volatile. But in wanting to be diversified, I know I should have some healthcare exposure and that’s where Johnson & Johnson (JNJ) comes in.
One of my concerns when investing in healthcare stocks is the segment of the market they are in and the safety and growth potential. I like to think of JNJ as a one-stop-shop for all of my dividend stock healthcare needs since they operate in three segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer segment offers all of those items under the Johnson’s brand name you find in your local drugstore. The Medical Devices segment is pretty self explanatory but it’s the Pharmaceutical segment which is a dark horse and provides significant potential catalysts for the stock. This division is responsible for researching drug products and vaccines and they have a good pipeline. Where as some healthcare companies (and their stock prices) live and die by the success of their drugs, since JNJ operates in other segments as well, they can both devote significant R&D spending on new drugs and also absorb some loses if they don’t pan out since JNJ is so large and has a legendary rock solid balance sheet. Put another way, JNJ is a dividend aristocrat (having increased their annual dividend for over 54 years straight!), they currently yield around 3%, and their dividend payout ratio is still less than 50%! All of which is why I think JNJ deserves a look in your dividend stocks portfolio.
- JNJ operates in the health care field in the consumer, pharmaceutical, and medical devices segments
- Founded in 1885 and based in New Brunswick, NJ
- Dividend Payout Schedule: 3-6-9-12
- To create monthly dividend income, pair with an investment from Dividend Payout: 1-4-7-10 and Dividend Payout: 2-5-8-11
Check out our YouTube review of JNJ!