Johnson & Johnson (JNJ): 53 Years of Low Risk Dividend Growth

Johnson & Johnson (NYSE:JNJ) was founded in 1886. Since that time, Johnson & Johnson (JNJ) has grown to become the largest health care business in the world.

The company has a market cap of $276.7 billion, generates over $70 billion a year in sales, and $16 billion a year in profits. JNJ is a favorite stock among several value investors. Dinald Yacktman, Richard Pzena, and Joel Greenblatt have large positions in the stock. Even Warren Buffett has a small stake in the company. Hedge funds, overall, own only 1.6% of the stock’s outstanding shares. They are underweight JNJ but this isn’t uncommon for stable, dividend paying stocks.

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You may have heard about the 3 most important aspects of real estate – location, location, location. Johnson & Johnson has its own 3 most important aspects – stability, stability, stability. Johnson & Johnson is perhaps the most stable ‘blue chip’ dividend growth stock investment around today. The company’s investor relations page gives a few amazing statistics about the companies consistency:

“Our consistent performance has enabled us to deliver an exceptional track record of growth that few, if any, companies can claim: 31 consecutive years of adjusted earnings increases and 53 consecutive years of dividend increases.”

There is a lot of (well deserved) discussion about the 52 Dividend Aristocrats– stocks that have paid increasing dividends for 25 or more consecutive years. Johnson & Johnson is a Dividend Aristocrat twice over.

Johnson & Johnson is a member of a far more exclusive group; the ‘gold standard’ of dividend stocks. Johnson & Johnson is a Dividend King. Dividend Kings are stocks with 50+ consecutive years of dividend increases. Click here to see all 16 Dividend Kings analyzed. The image below shows the company’s dividend growth history:

Johnson & Johnson’s stock price standard deviation shows just how stable and respected the business is… The company has a stock price standard deviation over the last decade of just 16.2%. This is the lowest of any large cap stock in the Sure Dividend database. The next two lowest are utilities; Southern Company (SO) and Consolidated Edison (ED) have long-term stock price standard deviations of 17.8% and 16.7%, respectively. Johnson & Johnson’s stock is less volatile than even high quality utilities.