Several subscribers recently asked about my favorite dividend growth stock of all time. Specifically, they asked which dividend stock I would own if I had to place all of my investment funds in one single stock. My answer is quite simple, as Johnson & Johnson (ticker: JNJ) is already the largest position in my portfolio. Today’s video explains why Johnson & Johnson is my favorite stock for dividends, complete with fundamental analysis.
Let’s Start With My Investing Video
Here’s What My Johnson & Johnson (JNJ) Video Is All About
I get started in today’s video with some high level thoughts. Why do I like this stock so much? It really comes down to some high level concepts including:
- Predictability (and stability)
- Incredible margins (gross profit and operating)
- Population trends (aging US population and growing global population)
Next, I dive into my Johnson & Johnson fundamental stock analysis. Specifically, I discuss concepts including:
- Revenue Growth: I really enjoy how revenue is up 25% comparing 2007 and 2017. I also like how revenue tends to grow predictably on a year-by-year basis. It’s like clockwork.
- US versus international mix: International sales are getting close to representing 50% of this company’s mix.
- Incredible Margins: Gross profit is at 66.8% (wow!) and operating profit is at 23% (both from the 2017 annual report).
- Dividend growth: I invest for passive income and cash flow! I need to buy companies to put cash in my pocket, cash that can be used to pay the bills. Johnson & Johnson is a great example, as they’ve raised their dividend over 105% comparing 2017 to 2007.
Despite stellar fundamentals, it looks like Johnson & Johnson has a PE ratio in the 22.94 range right now (possibly a bit lower). (NOTE: I pulled this number when I originally filmed this video, back in April, 2018.) I backed into this number, since EPS is thrown off by one-time tax items. Certainly, the stock is priced for perfection, but it always seems to be! While I’m not buying this stock in 2018 (other than reinvesting dividends), I do want to buy more. I’m waiting for a correction, although I never expect a big one with this stock.
Of course, there are a few risk factors with JNJ. I close out discussing those potential risks:
- Patent expiration and the need to always innovate in their pharmaceutical division.
- Overall pricing of their products (the US health care system is broken).
Related Dividend Investing Videos On My YouTube Channel
Want to learn more about my dividend growth investing strategies? Here are a few popular videos on how I would hypnotically invest different sums of money.
- If I were starting out all over again, here’s How I Would Invest $1,000 In Dividend Stocks.
- Here’s How I Would Start Investing With $5,000 In 2018 and Beyond.
- A very popular video on my YouTube Channel, here’s How To Invest $10,000 In Dividend Stocks.
- Hypothetically speaking, Here is How I Would Start Over Again With $25,000 In Dividend Stocks.
- Want to Invest $50,000 In Dividend Stocks? I think you’ll enjoy this video!
Disclosure: I am long Johnson & Johnson (JNJ). I own this stock in my portfolio.
Disclaimer: I’m not a licensed investment advisor, and today’s video (and blog post) are just for entertainment and fun. This video (and blog post) are NOT investment advice. Also, I’m not a tax advisor and today’s video (and blog post) NOT tax advice. Please talk to your licensed investment advisor before making any financial decisions.
All content on my YouTube channel is (c) Copyright IJL Productions LLC.