Johnson & Johnson (JNJ) increases dividend by 5%

Johnson & Johnson’s (NYSE:JNJ) dividend was increased by 5%.  Its overall yield is 2.72%. The firm started paying a dividend in 1972.

Johnson & Johnson is one of the largest global healthcare firms, operating in three giant segments including pharmaceutical, consumer, and medical devices. It brands include Listerine, Aveeno, Neutrogena, roC, Tylenol, Sudafed, Zyrtec, and Pepcid. Medical Device products are within orthopedic, general surgery, and bio-surgical.

Johnson & Johnson has maintained a three-year growth rate of dividends of 6.2 percent. Johnson & Johnson currently ranks 9th in dividend yield within the large cap healthcare, major drug manufacturer category. The quarterly dividend for the June payment will be $0.84 versus the prior year rate of $0.80 per share. Johnson & Johnson is not a member of our Top 100 Dividend Stocks.  (see below).

The dividend will be paid at the new higher rate on June 13, 2017, to shareholders of record at close of business on May 30, 2017. Johnson & Johnson is currently priced at $134.25. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
5/30/2017 0.84
2/24/2017 0.8
11/18/2016 0.8
8/19/2016 0.8
5/20/2016 0.8
2/19/2016 0.75
11/20/2015 0.75
8/21/2015 0.75
5/21/2015 0.75
2/20/2015 0.7
11/21/2014 0.7
8/22/2014 0.7
5/22/2014 0.7
2/21/2014 0.66
11/22/2013 0.66
8/23/2013 0.66
5/23/2013 0.66
2/22/2013 0.61
11/23/2012 0.61
8/24/2012 0.61
5/24/2012 0.61
2/24/2012 0.57
11/25/2011 0.57
8/26/2011 0.57
5/26/2011 0.57
2/25/2011 0.54
11/26/2010 0.54
8/27/2010 0.54
5/27/2010 0.54
2/19/2010 0.49

Analysis of Johnson & Johnson is based upon our five key criteria for the Top 100 list, which include;

Category Value Score
Dividend Yield 2.72% 227
Dividend Growth (3-7 year avg) 6.4 397
Forward P/E 20.03 203
S&P Financial Rating AAA 259
Beta 0.80 62
Total Score 1,148
% Yield 3 Year Div. Growth Rate 7 Year Div. Growth Rate SPS 2017 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr low Yield % 5 yr max Yield %
2.72% 6.2 6.6 27.55 4.49 2.70 4.70 2.44% 3.71%

Positives;

  • Johnson & Johnson maintains an investment grade rating of AAA.
  • Johnson & Johnson has paid out a dividend consecutively for the past 45 years.
  • Johnson & Johnson’s dividend yield is above that of the S&P 500 Index.
  • Johnson & Johnson maintains a beta of 0.80, lower than the average company.

Negatives;

  • Johnson & Johnson’s current dividend yield (2.72%) is below its five-year average historical dividend yield.
  • Johnson & Johnson is trading well above its ten-year average price/sales (P/S) ratio.
  • Johnson & Johnson is trading at a price/earning ratio above 20.

Earnings & Payout Data; 

 

2016 2015 2014 2013 2012
Earnings per Share 5.93 5.48 5.7 5.52 5.1
Annual Dividend 3.15 2.95 2.76 2.59 2.4
Payout Ratio 53.12% 53.83% 48.42% 46.92% 47.06%
Earnings per Share 2017 (projected) 6.61
Dividend 3.32
Payout Ratio 50.30%

Based on the firm’s below average historical dividend yield, high price/earnings ratio, and elevated price/sales ratio, Johnson & Johnson does not qualify as one of our Top 100 Dividend Stocks

Johnson & Johnson Dividend Yield Chart (Click to enlarge)
jnj

Chart Explanation:  Dividend growth stocks may be viewed undervalued when the current yield is above historical readings for the past 5 years.

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