Johnson & Johnson
To save time, you can read the first time, Lanny initiated the purchase and the 2nd re-up that Lanny also had. Further, JNJ was on Bert’s watch list during the month of May as well… talk about getting a lot of attention!
Dividend Diplomat Stock Screener Results
Time to quickly run JNJ through our stock screener:
1.) P/E Ratio at Time of Purchase = With projected EPS of $6.13 and a purchase price of $98.04, the P/E is 16 so below the industry and below the S&P of approximately 20 at the date of purchase.
2.) Yield at Time of Purchase = $98.04 was the purchase price and with a current dividend of $3.00 based on the recent increase announcement, the yield is at 3.06%. Much higher than the S&P 500, I like this foundation stock!
3.) Payout Ratio = at a current projected EPS of $6.13, this puts the payout ratio at approximately 49-50%, smack dead in the middle, love this as half the income goes to investors and the other half stays within the company. Also – still leaves room for the #5 of the growth rate history as well.
4.) 5 Year Dividend Yield Average = The 5 year yield average is approximately 3.10%. So not really over or undervalued per say, but appropriately valued regarding this metric, as it’s almost spot on.
5.) Dividend Growth Rate and History = As discussed in the previous posts, amazing track record – 50+ years and is at 7.10% average in 3 years and 7.24% average increase over 5 years. Better than my overall portfolio currently, so I’ll take that growth rate.
Why did Lanny Purchase more?
Not just because of the reasons above, but as I described in an earlier post or posts, I would love to have bigger positions of stronger companies. I previously had $1.5K of cost invested and wanted a round $3K, and this, well, this definitely did it, as I spent $1,500 additionally into JNJ adding over $46 in projected income for my portfolio (now my JNJ position spits out approximately $90 per year, loving it!). Therefore, I almost have at least 1 share going in almost every year with reinvestment. This is awesome and given that the power of reinvestment is huge, this amount will only continue to go up, and guess what – I feel great about that.
Why did Bert Initiate a Position?
Lanny, nice analysis up there. It fits our stock screener to a T and shows why you and so many other bloggers in the community purchased shares of JNJ over the last month. I am jealous of your position in the company; however, I am coming for you and hopefully I will be adding to my position over the next month or so to establish a sizeable position in my portfolio. I definitely want more of this iconic, foundation stocks! But I am putting the cart before the horse here, as I haven’t even talked about why I purchased JNJ in the first place. My reason for purchasing is slightly different, so here we go.
Last weekend, I identified a stock that I was interested in purchasing, Genuine Parts Company, and performed a stock analysis to see if it was a no-brainer investment that I thought it was after the market began its slide last week. While the results showed GPC is a great company with a great dividend track record, it didn’t wow me the way I was hoping and after the analysis, I simply rated JNJ as a better stock for my current portfolio. JNJ has a higher current yield, the PE Ratio is currently lower, and the company has a larger share buyback program than GPC. While some don’t view share buyback programs as a big deal, we think it can provide huge benefits to dividend investors. Again, very comparable companies, but the few differences between the two companies were enough to tilt the scale towards JNJ. So I purchased 17.24 shares, adding $52 in dividend income to my portfolio. I couldn’t be happier with this entry-level position and one day, I ideally would like to increase this amount to $75 before all is said and done.
Not a bad day at the office. In total, we both added $98 in total dividend income to our portfolios. Come on, can’t believe we were just shy of triple digits….MAN! Sometimes as investors, we can over-think decisions trying to find the best deal when there is a great, solid investment right in front of our eyes. That’s why this purchase was perfect for us and we both took advantage of yet another down period for the stock.
What are your thoughts about our purchase? Have you bought JNJ recently? Or have you purchased a different stock in this pullback? If not, are you planning on making any moves soon?