Long Term Dividend Investing JNJ in the S P 500 for Consistent Income

Investing in Johnson & Johnson (JNJ) for consistent income is a great strategy for long-term dividend investors. JNJ has been a consistent performer in the S&P 500, with over 50 years of dividend growth.

The company's commitment to paying dividends is evident in its history, with the first dividend payment made in 1944. JNJ has increased its dividend payout for 59 consecutive years, making it one of the longest dividend growth streaks in the S&P 500.

Investors who have held onto JNJ shares over the years have seen the dividend income grow significantly.

A unique perspective: Wealthfront S&p 500

Johnson & Johnson's valuation and expected returns are worth a closer look. The company's current share price is $164 and expected earnings-per-share is $9.93 for the year, giving it a price-to-earnings ratio of 16.5.

We view the stock as slightly undervalued, with a fair value P/E estimate of 17. This small increase would result in a 0.6% higher annual return over the next five years.

Johnson & Johnson's competitive advantages and recent business performance suggest a 6% average annual EPS growth rate is achievable. This, combined with a 0.6% multiple expansion and a 3.0% dividend yield, is expected to yield a total annual return of 9.6% through 2029.

Here's a breakdown of the expected annual returns:

The S&P 500 is a group of 500 of the largest publicly traded companies in the US. It's a great benchmark for investors to gauge the overall performance of the stock market.

Some of the companies that make up the S&P 500 have been consistently paying dividends for many years. For example, Exxon Mobil has been paying dividends for 42 years.

The longest dividend-paying streak in the S&P 500 belongs to Johnson & Johnson, which has been paying dividends for 63 years. That's a remarkable record of stability and reliability.

Here are some of the companies with the longest dividend-paying streaks in the S&P 500:

These companies have a proven track record of generating consistent cash flows and rewarding their shareholders with dividend payments.

Johnson & Johnson's valuation is an interesting topic. The company's current share price is $164, and with expected earnings-per-share of $9.93 for the year, its price-to-earnings ratio is 16.5.

This ratio is slightly lower than the fair value estimate of 17, which suggests the stock might be undervalued. Expansion of the P/E multiple from 16.5 to 17 would increase annual returns by 0.6% over the next five years.

The company's competitive advantages and recent business performance make a 6% average annual EPS growth rate achievable over the next five years. This growth, combined with the potential multiple expansion, could lead to higher returns.

Johnson & Johnson stock has a current dividend yield of 3.0%, which contributes to the expected total annual return. The breakdown of the expected returns is as follows:

These factors combined result in an expected total annual return of 9.6% through 2029.

Dividend investing is a reliable way to generate passive income from your portfolio. The S&P 500 Dividend Aristocrats index is a great place to start, featuring 67 companies that have raised their payouts annually for at least 25 consecutive years.

Johnson & Johnson is an ideal stock for investors seeking stable income, offering a 3% starting yield and an average annual increase of 6% over the past decade. This makes it perfect for those who want to live off their dividends or reinvest them for more shares.

The Dividend Aristocrats have been among the best dividend stocks to buy for reliable income growth over the past several decades. In fact, 3M had raised its payout for 64 consecutive years before spinning off its Solventum healthcare business, which isn't a quarterly dividend payer.

Investors can gain exposure to every stock in the S&P 500 Dividend Aristocrats index via the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which has an expense ratio of 0.35%. This ETF has $11.6 billion in assets under management.

Here's a list of some of the stocks in the S&P 500 Dividend Aristocrats index, sorted by the number of years they've consecutively raised their dividends:

Dividend payments will grow at a slower pace than capital appreciation of a share of stock, but investors can rely on increasing dividend yields to boost returns over time.

Risk Management is crucial for long-term dividend investing in JNJ. A well-diversified portfolio can help mitigate risks associated with individual stocks.

By holding a significant portion of JNJ's shares, you can benefit from the company's stable dividend payments, which have increased for 59 consecutive years. This stability can provide a sense of security in turbulent markets.

Having a solid risk management strategy is crucial, especially during economic downturns. Johnson & Johnson's impressive recession performance is a great example of this.

The company's size and scale are unmatched in its industry, and its AAA credit rating from Standard & Poor's and Moody's Investors Service is a testament to its financial stability. This allows Johnson & Johnson to make strategic acquisitions and investments.

Johnson & Johnson's research and development investment has led to a large portfolio of brands that dominate their respective categories. This is a result of the company's commitment to innovation and growth.

During the last major recession, Johnson & Johnson's earnings-per-share (EPS) results were impressive:

Despite the recession, Johnson & Johnson's EPS growth was nearly 12% from 2007 to 2009. This is a remarkable achievement that demonstrates the company's resilience and financial strength.

The company's dividend also continued to grow, with six decades of dividend growth under its belt. This is a great sign for investors looking for a stable and reliable income stream.

Johnson & Johnson is a great example of a company that has successfully managed its dividend payout over the years. In 1972, it paid $0.009315 per share in annual dividends.

A key factor in Johnson & Johnson's ability to grow its dividend payout was its increasing stability as a company. By 1993, it had a suite of consumer products that sold well regardless of the economic backdrop.

The company's payout ratio also played a crucial role in its dividend growth. In 1993, Johnson & Johnson paid out roughly 35% of its net income as dividends.

Suggestion: Taxes on Dividends vs Interest