Although inflation slightly declined from the 40-year high level in July, the 8.5% CPI level is still ‘uncomfortably high’ for policymakers. Moreover, the U.S. economy witnessed…
two consecutive quarters of economic contraction.
To achieve its long-term target of 2% inflation, the Federal Reserve Chairman has indicated that the central bank will use the monetary policy measures at its disposal, including aggressive interest rate hikes. The Fed’s hawkish stance is expected to keep the market under pressure in the upcoming months.
Therefore, investing in high dividend-paying stocks could help investors cushion their portfolios against market uncertainty by generating a steady income stream. Given their decades-long history of consistent dividend payments, Johnson & Johnson (JNJ), AbbVie Inc. (ABBV), and Becton, Dickinson and Company (BDX) could be ideal investments now.
Johnson & Johnson (JNJ)
JNJ is engaged in research and development, manufacturing, and selling healthcare products, primarily focused on human health and well-being. The company operates through three segments: Consumer, Pharmaceutical, and Medical Devices. It offers its products to the general public, retail outlets and distributors, wholesalers, hospitals, and healthcare professionals.
JNJ’s four-year average dividend yield is 2.60%, and its current dividend translates to a 2.73% yield. Its dividends have grown at a 5.8% CAGR over the past three years and a 5.9% CAGR over the past five years. The company has been paying dividends for 59 consecutive years.
On August 24, 2022, the company received the FDA’s approval for IMBRUVICA® (ibrutinib) for treating pediatric patients with chronic graft-versus-host disease (cGVHD). With this approval, IMBRUVICA became the first FDA-approved therapy for patients with a life-threatening illness. Susan Stewart, Executive Director of BMT InfoNet, said, “The FDA approval of IMBRUVICA puts another weapon in their arsenal and has the potential to truly make a difference for those who are faced with this challenging disease.”
During the fiscal second quarter (ended June 30, 2022), JNJ’s net sales increased 3% year-over-year to $24.02 billion. Its gross profit rose 2.4% from the year-ago value to $16.10 billion. The company’s non-GAAP net earnings grew 4.3% from the same period last year to $6.91 billion, while its adjusted EPS came in at $2.59, representing a 4.4% increase year-over-year.
Analysts expect JNJ’s revenues to increase marginally year-over-year to $23.59 billion for the fiscal third quarter (ending September 30, 2022). Its EPS is expected to increase 6.7% to $2.27 in the next quarter ending December 31, 2022. The company has surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent.
The stock has gained 4.6% over the past nine months to close the last trading session at $165.34.
JNJ’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
JNJ also has an A grade for Stability and a B for Growth, Value, Sentiment, and Quality. The stock is ranked first of 167 stocks in the Medical – Pharmaceuticals industry. Click here to see the JNJ’s rating for Momentum.
AbbVie Inc. (ABBV)
ABBV is engaged in developing, manufacturing, and selling pharmaceuticals globally. It offers its products in various categories: immunology, oncology, neuroscience, eye care, and women’s healthcare. The company markets its products to wholesalers, distributors, government agencies, health care facilities, and independent retailers.
ABBV’s four-year average dividend yield is 4.64%, and its current dividend translates to a 4.1% yield. Its dividends have grown at a 9.9% CAGR over the past three years and 17.5% CAGR over the past five years. ABBV is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
On July 26, 2022, the European Commission approved the company’s RINVOQ (upadacitinib) for treating adults with moderate to severe ulcerative colitis who have had an inadequate response and lost response or were intolerant to either conventional therapy or a biologic agent. This approval should strengthen ABBV’s ability to treat patients with ulcerative colitis.
ABBV’s net revenues increased 4.5% year-over-year to $14.58 billion in the second quarter that ended June 30, 2022. The company’s non-GAAP net earnings increased 10.7% from the year-ago value to $6.06 billion, while its…
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