Johnson & Johnson: The Best Dividend Growth Stock

Johnson & Johnson (JNJ) engages 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 and Diagnostics. Johnson & Johnson is a major component of the S&P 500, Dow Industrials and the Dividend Aristocrats Indexes. One of the company’s largest shareholders includes Warren Buffett. JNJ has been consistently increasing its dividend for 48 consecutive years. Dividend author Dave Van Knapp has also included the company in his most recent book "The Top 40 Dividend Stocks for 2010".Over the past decade this dividend stock has delivered a 4.90% average annual total return to its shareholders.At the same time company has managed to deliver a 11.10% average annual increase in its EPS since 2000. Analysis expect a 9.80% increase in EPS to $4.83 in 2010, follow by an 8% increase to $5.23 in 2011.Johnson & Johnson is the first stock that comes to mind when illustrating the benefits of dividend investing. The company has been enormously successful, has a strong competitive advantage and as a result has managed to boost distributions for 48 consecutive years. It is no surprise that it is found in the portfolios of most dividend investors. The company’s sales and earnings growth would be driven by the company’s ongoing acquisition program, its pharmaceutical pipeline as well as expansion in emerging markets. Remicade and Stelara are two drugs which could fuel growth in sales, as is a new blood thinner drug under development, which would prevent strokes in patients. The company should do well due to its diversified revenues coming from drugs, consumer products and medical devices. Despite its size, Johnson & Johnson is highly innovative and aggressively funding new product development in order to maintain leadership positions.... Read more

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