Monday, May 3, 2021

Ten Dividend Stocks For Further Monitoring

As part of my monitoring process, I review the list of dividend increases every week. I tend to focus my attention on the companies with a more established track record of annual dividend increases, in order to uncover companies that can deliver sustainable results for the longest period of time. I try to focus on companies I can own for decades, through several recessions. Hence, I try to avoid fads, even if they make others richer temporarily. 

This exercise helps me monitor existing holdings, but also helps me identify companies for further research.

During the past week, there were several companies that raised their quarterly dividends. I have listed the ones that have managed to increase dividends for at least a decade ( except for Apple, which is one of the largest dividend payers in the US).

Apple Inc. (AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.

The company raised its quarterly dividend by 7.30% to 22 cents/share, which marked its 9th consecutive annual dividend increase. It’s very likely that Apple would become a dividend achiever next year. During the past 5 years, it has managed to increase dividends at an annualized rate of 9.70%.

Between 2011 and 2020, Apple managed to boost earnings from 99 cents/share to $3.28/share.

Apple is expected to earn $5.16/share in 2021.

The stock is selling for 25.45 times forward earnings and yields 0.67%.

Ameriprise Financial, Inc. (AMP) provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other.

Ameriprise Financial increased its quarterly dividend by 8.70% to $1.13/share. This marked the 17th year of consecutive annual dividend increases for this dividend achiever. During the past decade, the company has managed to increase dividends at an annualized rate of 19.10%.

Ameriprise grew earnings from $4.53/share in 2011 to $12.20/share in 2020.

The company is expected to earn $21.01/share in 2021.

The stock sells for 12.30 times forward earnings and offers a dividend yield of 1.75%.

American Water Works Company, Inc. (AWK) provides water and wastewater services in the United States.

The company raised its quarterly dividend by 9.50% to 60.25 cents/share. This marked the 14th consecutive year of annual dividend increases for this dividend achiever. During the past decade, American Water Works has managed to increase dividends at an annualized rate of 9.80%.

American Water Works earned $1.75/share in 2011, and managed to grow earnings to $3.91/share in 2020.

American Water Works is expected to earn $4.23/share in 2021.

The stock is selling for 36.90 times forward earnings and has a current dividend yield of 1.54%.

Chevron Corporation (CVX), engages in integrated energy, chemicals, and petroleum operations worldwide.

The company raised its quarterly dividend by 3.90% to $1.34/share. This increase puts Chevron on track to make 2021 the 34th consecutive year with an increase in annual dividend payout per share. Over the past decade, Chevron has managed to increase dividends at an annualized rate of 6.20%. Chevron is more likely to stay on the dividend aristocrats list than peer Exxon Mobil, since Exxon failed to raise dividends last year.

Chevron earned $13.44/share in 2011, but earnings have kept going lower and lower throughout the past decade, reflecting the soft environment for oil and gas prices. The company lost $2.96/share in 2020.

Chevron is expected to earn $5.46/share in 2021.

The stock is selling for 18.76 times forward earnings and yields 5.20%.

W.W. Grainger, Inc. (GWW) distributes maintenance, repair, and operating products and services in the United States, Canada, and internationally. 

W.W. Grainger  increased its quarterly dividend by 5.90% to $1.62/share. This is the 50th consecutive annual dividend increase for this newly minted dividend king.  Over the past decade, the company has managed to grow dividends at an annualized rate of 11.10%.

"We are proud today to announce our 50th year of consistent annual dividend increases. We remain committed to our capital allocation strategy which allows us to return value to shareholders through consistent increases in the dividend and share repurchases while continuing to invest in the business," said Grainger Chairman and CEO, DG Macpherson.

The company is expected to earn $19.26/share in 2021. For reference, the company earned $9.07/share in 2011 and managed to grow it to $12.82/share in 2020.

The stock sells for 22.51 times forward earnings and yields 1.49%.

International Business Machines Corporation (IBM) provides integrated solutions and services worldwide.

IBM hiked its quarterly dividend by a penny to $1.64/share. This is the 26th year in a row that IBM has increased its quarterly cash dividend. This was also the second year in a row in which IBM raised its quarterly dividend by 1 cent. This is a far cry from the ten year annualized dividend growth rate of 10%. IBM is a dividend aristocrat with a 26 year track record of annual dividend increases.

Between 2011 and 2020, IBM’s earnings went from $13.06/share to $6.23/share.

The company is expected to earn $10.93/share.

The stock is selling for 12.99 times forward earnings and offers a dividend yield of 4.62%.

Paychex, Inc. (PAYX) provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States and Europe.

The company increased its quarterly dividend by 6.50% to 66 cents/share. This is the 11th year of Paychex increasing its annual dividends to shareholders. 

During the past decade, the company has managed to increase dividends at an annualized rate of 7.20%.

Paychex earned $1.42/share in 2011 and managed to grow that to $3.04/share in 2020.

The company is expected to earn $2.99/share in 2021.

The stock is selling for 32.59 times forward earnings and yields 2.71%.

Northwest Bancshares, Inc. (NWBI) operates as a holding company for Northwest Bank that offers various personal and business banking solutions.

The company raised its quarterly dividend by 5.30% to 20 cents/share. This marked the 12th year of consecutive annual dividend increases for this dividend achiever. During the past decade, the company has managed to increase dividends at an annualized rate of 6.60%.

The bank is expected to earn $1.08/share in 2021. For reference, it earned 64 cents/share in 2011.

The stock is selling for 12.95 times earnings and yields 2.69%.

Regal Beloit Corporation (RBC) designs, manufactures, and sells electric motors, electrical motion controls, and power generation and transmission products worldwide.

The company hiked its quarterly dividend by 10% to 33 cents/share. This marked the 17th consecutive annual dividend increase for this dividend achiever. It has a ten year dividend growth rate of 6.20% annualized. 

Between 2011 and 2021, the company managed to increase earnings from $3.79/share to $4.64/share.

Regal Beloit is expected to earn $7.19/share in 2021. 

The stock is selling for 20.08 times forward earnings and yields 0.91%.

First Financial Bankshares, Inc. (FFIN), provides commercial banking products and services in Texas. 

First Financial Bankshares increased its quarterly dividends by 15.40% to 15 cents/share. This was the eleventh consecutive annual dividend increase for this dividend achiever. The bank has managed to grow dividends at an annualized rate of 8.20%.

Between 2011 and 2020, the company managed to increase earnings from 54 cents/share to $1.42/share. The company is expected to earn $1.52/share in 2021.

The stock sells for 32.30 times forward earnings and yields 1.22%.

Relevant Articles:

- Eight Dividend Growth Stocks Rewarding Shareholders With A Raise

- Seven Dividend Growth Stocks Raising Distributions to Shareholders Last Week

- Six Reliable Dividend Growth Stocks Rewarding Shareholders With Raises

13 Dividend Growth Stocks Raising Shareholder Distributions

Thursday, April 29, 2021

The Ones That Got Away…

I spend a lot of time looking for quality companies available at attractive valuations. Sometimes, I find a great company that fits my fundamental requirements, but the entry price is a little high for my liking.

I try to wait until the entry price is met, before putting my hard earned capital to use. I do this, in order to maintain discipline in my investing approach. I believe that if I slip in one area of my life in terms of discipline, I will slip everywhere. This is an outcome I try to avoid as much as possible.

The purpose for not overpaying for securities, is because a lower entry price means that I have a higher potential for long-term future returns. A lower entry price also translates into a higher dividend yield from the start.

If an asset is worth a certain amount at a certain period of time, it is logical to try and invest at an entry price that can generate a high return. Paying too much can decrease those returns. A lower valuation also helps in selecting between different investment opportunities available in the marketplace.

The downside to having an investment discipline is that no investment approach is bulletproof. I play the odds when I buy securities, because in reality, not all investments will work out. Some investments may check all the boxes, but still turn out to be duds. Other investments may not look perfect, but surprise on the upside. The importance is to do well on average, over long periods of time ( think – decades).

I have not done investments in the past, where everything was perfect, but the valuation was just a tad over 20 times forward earnings. I used to avoid companies selling above 20 times earnings, which was equivalent to an earnings yield of 5%. For the period of 2008 - 2019, it has usually been the case that I could find quality companies at a P/E below 20. But I also missed quite a few too.

A very good example involves Starbucks (SBUX), which I had been monitoring in July 2018. The price was very close to my entry criteria at the time, but I didn’t invest in it, and it just ran away from me.

While I did not buy these companies for the Dividend Growth Investor Portfolio, I notified readers that I am looking at these opportunities. Some may have bought them, and profited nicely in the process. Others may have bought some later.

Another good example is Broadridge (BR), which I monitored closely in December 2018 and January 2019 as it was very close to being in the money. Unfortunately, the stock also ran away from me. I was able the buy some at the end of 2019 and in 2020 however, after monitoring it for a while and deciding it was fine to overpay a little. This happened after I wrote this article in early 2019.

A third example is PepsiCo (PEP), which was actually around 20 times forward earnings for a long period of time, but I dragged my feet and it ran away. I did buy some PepsiCo (PEP) for the first time in a long time in 2020 and then added a little more to the position.

On the other hand, I didn't invest in 3M (MMM) until it fell to or below 20 times forward earnings in 2018. While the stock's earnings were around $9 - $10/share, the stock price has fluctuated between 150 and 280.

Why am I writing this?

I see everything as a learning opportunity. This is a lesson to learn, that we cannot time the market. This is why we should stick to a process no matter what.

Investing is not a black and white process however. Investing is part art, and part science.

This is why we need to try and learn from any potential blind spots we may have. But the art part is not learning the lesson "too literally".

Sometimes, if a good company is identified at a decent valuation, it may make sense to buy the stock. This is not an excuse to buy stocks without looking of course. We sometimes learn lessons a little bit too literally, and the outcome may still be unfavorable. It merely means that sometimes, being too disciplined could be counter-productive. But if you stick to a battle-tested process that makes sense to you, you have the odds of success in your favor over the long term.

In other words, if a stock is going to be worth $100/share in a decade and would be paying a dividend of $4/share then, it does not really matter if I paid $40 for it or $41/share. The important factor is to get invested in that security.

If that security ultimately goes to zero in a decade, and eliminates dividends, it also makes little difference whether I waited to buy it at $39/share or overpaid at $41/share. While I do not actively try to buy companies that would go to zero, I do know that sometimes even the best laid plans have surprises for us.

The important model to have in my head is that P/E ratios should not be viewed in isolation, but neither should growth rates. They need to be looked at together. As Buffett has stated, value and growth are attached at the hip.

My observation over the past year is consistent with the observation from the past decade. There are usually companies that are almost always available at a good price. But there are also companies that are rarely available at a good enough entry price. As an investor, I should be focusing on snapping the ones that are rarely undervalued first, and then focusing on the ones that are frequently attractively valued. As we can see during the December 2018, and March 2020 declines can be quick and recoveries even quicker. Therefore it makes sense to have a list of companies that you want to own at a certain price, and then be ready to act if/when they are available.

While it has been an interesting lesson for me, I have started to be more willing to pay up for what I perceive as quality in 2020. I realize that this may sound like I am finally throwing the towel, but I disagree. Up until recently, a lot of good quality companies could have been found at a P/E of around 20. Even companies like Microsoft (MSFT), Moody's (MCO), Visa (V), Sherwin-Williams (SHW), S&P Global (SPGI) had long periods of time where they were available at or below 20 times forward earnings over the past decade. As rates have gone down, P/E ratios have gone up. Especially the P/E ratios for companies with earnings that can grow.

After writing this article in 2019, I actually bid for Broadridge (BR) in late 2019 and even managed to buy at a decent valuation in 2020. I have not been disappointed. It is still a learning curve however.

At the end of the day, you win some, and you lose some. But the most important lesson is to identify your investment goals and objectives, develop a process on how to achieve them, and then executive on the plan through thick and thin. Important ideas such as diversification, margin of safety and valuation are the friends of the long-term dividend investor. It is important not to abandon the process in search of quick gains, but stick to it, in order to achieve the investment goals and objectives. But it is even more important to go ahead and try to improve on that process over time, without taking lessons too literally, and remaining flexible in your approach.


Monday, April 26, 2021

Eight Dividend Growth Stocks Rewarding Shareholders With A Raise

I review the list of dividend increases as part of my monitoring process. I find it helpful to evaluate companies with a long streak of annual dividend increases of at least ten years. The process of checking the list of dividend increases every week helps me identify hidden dividend gems for further research.

 This process also helps me to review existing holdings, and update my research file for them. This is helpful whenever I have money to invest, since a recent dividend action is one of the inputs I use to establish whether I want to buy a stock.

During the past week, there were several companies that raised dividends to shareholders. I am mentioning the ones with at least a ten year streak of annual dividend increases in the article below:

The Southern Company (SO) engages in the generation, transmission, and distribution of electricity. It operates in four segments: Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services

Southern Company raised its quarterly dividend by 3.12% to 66 cents/share, marking the 20th consecutive year of annual dividend increases. During the past decade, this dividend achiever has managed to grow dividends at an annualized rate of 3.50%.

Earnings grew from $2.55/share in 2011 to $2.93/share in 2020.  The company is expected to earn $3.31/share in 2021.

The stock sells for 19.71 times forward earnings and has a dividend yield of 4.04%.

The Travelers Companies, Inc. (TRV) provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance.

Traveler’s Companies raised quarterly dividends by 3.50% to 88 cents/share, marking 17 consecutive years of dividend increases with a compound annual growth rate of 9% over that period.

This dividend achiever also added $5 billion to its existing 805 million share buyback program, which is equivalent to almost 15% of the company’s market capitalization. Unlike dividends however, the timing of buybacks is never certain.

Earnings grew from $3.36/share in 2011 to $10.52/share in 2020. The company is expected to earn $10.95/share in 2021.

The stock is selling for 14.41 times forward earnings and offers a current yield of 2.23%.

Johnson & Johnson (JNJ) researches and develops, manufactures, and sells a range of products in the health care field worldwide.

Johnson & Johnson raised its quarterly dividend by 5% to $1.06/share. This marked the 59th consecutive year of dividend increases for this dividend king. During the past decade, Johnson & Johnson has managed to grow dividends at an annualized rate of 6.60%.

"Despite a year of unprecedented disruption, Johnson & Johnson remained committed to its established financial principles that strengthen our ability to drive long-term value for stakeholders. In recognition of our notable 2020 results, strong financial position and confidence in the future of Johnson & Johnson, the Board of Directors has voted to increase the quarterly dividend for the 59th consecutive year," said Alex Gorsky, Chairman and Chief Executive Officer of the company.

Earnings grew from $3.49/share in 2011 to $5.51/share in 2020. Earnings per share have had large one-time items deducted from them in recent years, which artificially suppress the profits. The company is expected to earn $9.56/share in 2021.

The stock sells for 17.32 times forward earnings and yields 2.56%.

Parker-Hannifin Corporation (PH) manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide.

The company raised its quarterly dividend by 17% to $1.03/share.

"This dividend increase reflects the Board's confidence in our financial position and our continued ability to generate strong cash flows throughout the business cycle,” said Todd Leombruno, Executive Vice President and Chief Financial Officer.  “We remain committed to maintaining our record of increasing our annual dividend payout which now stands at 65 consecutive fiscal years and is among the top five longest-running dividend-increase records in the S&P 500 Index.”

This dividend king has a record of increasing its annual dividend payout for 65 consecutive fiscal years.

Parker-Hannifin has managed to grow dividends at an annualized rate of 12.60%.

Earnings grew from $6.37/share in 2011 to $9.29/share in 2020. The company is expected to earn $14.19/share in 2021.

The stock sells for 22.42 times forward earnings and yields 1.30%.

Bar Harbor Bankshares (BHB) operates as the holding company for Bar Harbor Bank & Trust that provides commercial, retail, and wealth management banking services.

The bank raised its quarterly dividend by 9.10% to 24 cents/share. This marked the 18th year of annual dividends increasing for this dividend achiever. Over the past decade, the bank has managed to grow dividends at an annualized rate of 6.60%.

Earnings grew from $1.27/share in 2011 to $2.18/share in 2020. 

The stock is selling for 13.52 times earnings and yields 3.26%.

J.B. Hunt Transport Services, Inc. (JBHT) provides surface transportation and delivery services in North America. It operates through five segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT).

The company raised its quarterly dividend by 11.10% to 30 cents/share. This is the 17th year of consecutive annual dividend increases for this dividend achiever. Over the past decade, the company has managed to grow dividends at an annualized rate of 8.40%.

Earnings grew from $2.11/share in 2011 to $4.74/share in 2020. The company is expected to earn $6.54/share in 2021.

The stock  is selling at 25.88 times forward earnings and yields 0.71%.

Premier Financial Corp. (PFC) operates as the holding company for Premier Bank and First Insurance Group that provides community banking and financial services.

The company hiked its quarterly dividend by 8.30% to 26 cents/share. This is the tenth year of consecutive annul dividend increases for this newly minted dividend achiever. The ten year dividend growth is higher than the last hike, because the company eliminated dividends in late 2009 and paid no dividends in 2010. It initiated a small dividend at the end of 2011 and has been growing it since.

Earnings grew from $0.71/share in 2011 to $1.75/share in 2020. The company is expected to earn $3.22/share in 2021.

The stock is selling for 10.07 times forward earnings and yields 3.20%.

Whirlpool Corporation (WHR) manufactures and markets home appliances and related products. It operates through four segments: North America; Europe, Middle East and Africa; Latin America; and Asia. 

The company raised its quarterly dividend by 12% to $1.40/share. Annual dividends have increased each year since 2010, even though the company did not raise dividends in 2012. The company has raised dividends at an annualized rate of 10.90% over the past decade.

"I am pleased to announce that we are increasing our dividend for the ninth consecutive year and have approved a significant expansion of our share repurchase program," said Marc Bitzer, chairman and chief executive officer of Whirlpool Corporation. "These actions highlight the confidence we have in our business to continue generating strong levels of cash and reflect our continued commitment to creating strong shareholder value."

Earnings grew from $4.99/share in 2011 to $17.07/share in 2020. The company is expected to earn $23.63/share in 2021.

The company's Board of Directors also authorized an additional $2 billion share repurchase program. The new authorization is in addition to the $531 million unused portion of the previous program as of December 31, 2020. For reference, the market capitalization of Whirlpool is around $15 billion.

The stock is selling for 10.11 times forward earnings and yields 2.34%.

Relevant Articles:

- Johnson & Johnson (JNJ) Hikes Dividends By 5%

Three Banks Raising Dividends to Shareholders

- Six Reliable Dividend Growth Stocks Rewarding Shareholders With Raises

Happy Coca-Cola Dividend Day Warren Buffett



Friday, April 23, 2021

How To Handle Declines In Share Prices

When stocks are volatile or start falling sharply. I start receiving an above average level of inquiries from readers, asking if now is the time to consider buying.

These questions are rational and logical. After all, a drop in stock prices definitely creates more opportunities to identify quality companies at a lower valuation. When you buy at lower prices, you lock in higher dividend yields from the start, and you can generate higher returns potentially than if you bought at higher prices. It is important to make sure that the dividends are secure of course, and there is sufficient earnings power behind them to cover the distribution.

It is possible that acting right away may be a wise move, if stocks rebound like they did after the December 2018 and March 2020 lows. However, you never know if stock prices may not go even lower from here, confusing everyone else who has been conditioned to just buy the dip over the past decade. It is always good to have a shopping list ready at all times however.

I believe that slowly adding on the way down may work ok. I usually do some buying every month because I invest when I have money to invest. I believe that regular investment each month in the best values I can find at the time beats sitting in cash, waiting for a crash. Time in the market beats timing the market.

I believe that investing regularly in companies available at nice entry valuations when you have the money is the best thing to do. It allows me to receive dividends earlier, and to get the longest possible compounding of earnings and dividends. I do not believe that in the grand scheme of things it would matter 20 - 30 years from now if I bought for example Altria (MO) at $45 or $55/share. If Altria ends up generating $200 in wealth per share over the next 20 years, the difference will not be much in entry price. If Altria goes to zero, it wont matter either if I bought at $45 or $55/share. Given forward earnings of $4.58 for 2021 and annual dividends of $3.44/share, I believe that the stock offers a good value at either price point. It has managed to grow earnings and dividends per share at a steady rate, albeit it has made some ill-timed acquisitions that I disagree with. But some good businesses can withstand some managerial missteps too, as they are resilient. 

That being said, this is also not an excuse to just buy at any valuation. I do look at P/E ratios, in conjunction with dividend yields, dividend and earnings growth, and bond yields in order to come up with a rough estimate of whether a stock is cheap or expensive. I cannot put it into a formula however. I do believe valuation is more art than science. You can read more about my valuation techniques here, though you should know that I also have evolved and have raised my P/E ratio requirement higher.

So while I doubt it would matter in the next 20 years whether I bought Altria at $45 or $55/share, it may matter if the P/E multiple is at 40, given the growth rate today. That means that I won't pay $180/share for Altria today. There are companies like Brown-Forman (BF.B) today that sell at that range. It does matter if I paid 40 times forward earnings for Brown-Forman today or 20 times earnings for Brown-Forman (BF-B) today. Given the forward earnings of $1.70/share for 2021 and annual dividends of 72 cents/share, I cannot make myself pay even $51/share today for this asset. There are other quality companies with similar growth trajectories and stability of earnings streams today, available at cheaper prices.

At the end of the day, what really matters is selecting companies that can grow earnings and dividends over time, which results in compounded returns on capital. In a previous article I compared  the impact of a regular investment in Johnson & Johnson (JNJ) at its lows to an investment in Johnson & Johnson at regular intervals. I found that the latter approach delivered returns which were not too bad relative to the perfect approach of buying into every bottom. As we know, no one can consistently buy at the bottom. However, we can all develop a strategy that we can follow with a level of consistency ( example being allocating money every month or so, through thick or thin). In retrospect, Johnson & Johnson was quite often attractively valued at that time as well.

Luckily, in the past 13 - 14 years that I have shared my thoughts on Dividend Growth Investing, I have always found at least 10 - 15 attractively valued companies to invest in every single month. This makes it easy to deploy funds in the best values I find at the moment no matter whether we are in a bull or bear market. It helps me to invest consistently, and focus on time in the market, not timing the market.

I believe that the ability to buy shares regularly at a good valuation is more important than getting the best price. Waiting for the best price may turn into market timing, which can lead to behavior errors. By keeping it simple and investing every month on a regular schedule, I will be able to build my portfolio through the ups and downs of investor sentiment, and I will be able to build out a diversified portfolio by taking advantage of stocks and sectors when they are temporarily out of favor. I have the power of compounding working for me for the longest period of time by investing regularly.




Tuesday, April 20, 2021

Johnson & Johnson (JNJ) Hikes Dividends By 5%

 Johnson & Johnson (JNJ), together with its subsidiaries, is engaged in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices & Diagnostics. This dividend king has paid dividends since 1944. Dividend increases have been like clockwork every year for decades. Check my analysis of Johnson & Johnson (JNJ) for more information about the company.

I just read that Johnson & Johnson (JNJ) has hiked dividends by 4.95% to $1.06/share. This marked the 59th consecutive annual dividend increase for this dividend kingThere are only 29 companies in the US which have managed to increase dividends annually for at least 50 years in a row.

Over the past decade, Johnson & Johnson has managed to grow dividends at an annualized rate of 6.60%/year.

When reviewing press releases that discuss dividend increases, I always find it helpful to see the tone from top management. I especially liked what the CEO had to say (Source: Press Release):

"Despite a year of unprecedented disruption, Johnson & Johnson remained committed to its established financial principles that strengthen our ability to drive long-term value for stakeholders. In recognition of our notable 2020 results, strong financial position and confidence in the future of Johnson & Johnson, the Board of Directors has voted to increase the quarterly dividend for the 59th consecutive year," said Alex Gorsky, Chairman and Chief Executive Officer of the company.

This dividend increase is a testament to the stability of the business model. Johnson & Johnson was one of the first companies to raise dividends in April 2020, amidst the uncertainty of the Covid-19 pandemic. It has also delivered during the last few crises, such as during the Global Financial Crisis of 2007 - 2009. When other companies cite current conditions as unprecedented,  Johnson & Johnson actually can provide guidance on revenues and earnings. It is always reassuring to understand that long term fundamentals remain intact, no matter what life throws at this business.

The company lifted its 2021 guidance to $9.42 - $9.57/share. This strong performance is one of the reasons behind the 59th consecutive annual dividend increase. (Press Release)

The valuation seems fine today at 17.10 times forward earnings, albeit it would always be better if the stock is available at a lower price. The stock yields 2.60%.

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