There are few firms on the market with an unblemished observe document of annual dividend will increase that even have pristine financials to make sure that the dividend raises will proceed.
Johnson & Johnson (NYSE: JNJ) is definitely one in every of them.
The corporate has raised its dividend yearly because it started paying one in 1972. Final yr marked the fiftieth yr in a row that the drug and client merchandise firm lifted the dividend.
That’s what you name a powerful observe document.
Okay, so the dividend-paying historical past is great. However so is its money circulation development.
In 2021, the maker of Band-Aids, medical gadgets and cancer-fighting medicine, together with many different merchandise, generated $19.8 million in free money circulation. That determine is anticipated to develop to $22.9 billion when Johnson & Johnson experiences full-year 2022 outcomes and rocket to $26.7 billion this yr.
The corporate is forecast to have paid out $11.5 billion in dividends in 2022, simply 50% of its free money circulation. If the 2023 free money circulation and dividends paid projections are appropriate, this yr, the corporate’s payout ratio will dip to 45%.
I wish to see an organization’s payout ratio under 75%. So 45% is sort of low and suggests the corporate has numerous room to lift the dividend even when free money circulation isn’t as sturdy as predicted.
Johnson & Johnson’s dividend is as secure as a wager that almost all New 12 months’s resolutions can be forgotten by February.
Dividend Security Score: A
If in case you have a inventory whose dividend security you’d like me to research, depart the ticker image within the feedback part. And don’t overlook to go looking the positioning to see whether or not I’ve written about your favourite inventory lately. Simply click on on the magnifying glass within the high proper nook, kind within the firm’s title and hit enter.
The submit A Dividend Hike That’s a Slam Dunk appeared first on Rich Retirement.