Summary
Johnson & Johnson is truly one of the most beloved dividend growth stocks and a cornerstone of many portfolios.
The story from Reuters alleging the presence of asbestos in JNJ's baby powder severely slammed the stock Friday and it was down again Monday.
Purchasing a small position in JNJ after the beat down it has received seems like a smart move.
Whenever someone asks me to name my favorite dividend growth stock, I usually say 3M Co. (MMM). BUT! I usually follow it up very quickly with Johnson & Johnson (JNJ) and one or two others which we won't discuss here.
JNJ is one of the top shelf dividend growth stocks, having raised their dividend for 56 straight years putting them in the rare "dividend king" category (a streak greater than 50 years). And they generally raise it at a nice clip, not this penny per quarter stuff that some other stocks are doing.
The company is massive, their revenues are growing, their free cash flow is huge and growing, and their balance sheet is a fortress even with a $30 billion acquisition in the past year. Add all that to the fact that they are a dividend king and have a very respectable 2.7% yield as I type this and you can see why they are beloved.
Let's take a look at each of these a little bit more closely and we'll also discuss the talc litigation and possible drawbacks to purchasing now.
