5. Kenvue Inc. (NYSE:KVUE)
Dividend Yield as of July 17: 4.30%
Kenvue Inc. (NYSE:KVUE) is a New Jersey-based consumer health company. Last year, the company completed its separation from Johnson & Johnson, marking its transition to a fully independent company. It’s a given that corporate breakups and restructurings often bring uncertainty, which has understandably affected both Kenvue and Johnson & Johnson’s recent stock performance. Despite these challenges, Kenvue has the potential to emerge as a strong high-yield dividend stock suitable for long-term investment.
That said, analysts are concerned that buying Kenvue Inc. (NYSE:KVUE) could result in the possibility of encountering sluggish growth, potentially resulting in a stagnant stock price. This scenario could undermine an investment strategy focused on dividend payouts, despite Kenvue’s strong brands facing competition in their respective markets. Since its separation from J&J in August 2023, the stock has declined by over 21%. However, it has a strong portfolio of leading brands such as Band-Aid, Tylenol, Listerine, Neutrogena, and Aveeno, among others. These products typically exhibit resilient performance, demonstrating stability regardless of economic conditions. Harris Associates also highlighted the potential of Kenvue Inc. (NYSE:KVUE) in its Q1 2024 investor letter. Here is what the firm has to say:
“Kenvue Inc. (NYSE:KVUE) became the largest standalone consumer health company following its split-off from Johnson & Johnson in May 2023. The company’s highly recognizable brands, such as Neutrogena, Listerine, Tylenol and Band-Aid, have been market share leaders in their respective categories for generations. However, Kenvue’s first year as a public company was clouded by litigation and market share losses in certain categories. As a result, Kenvue now trades for just 16.5x trailing earnings, a substantial discount to the market and other consumer health and packaged goods companies. We see an opportunity for the company to improve efficiency and re-invest the cost savings into increased product development and marketing, which should help improve its growth and brand equity.”
Kenvue Inc. (NYSE:KVUE) offers a quarterly dividend of $0.20 per share. As long as the company announces a dividend increase by the end of the year, it will maintain its status as a Dividend King, a title it inherited from J&J. For now, the company maintains a 62-year streak of consistent dividend growth, which makes KVUE one of the best dividend aristocrat stocks on our list. The stock sports a dividend yield of 4.30%, as recorded on July 17.
At the end of March 2024, 47 hedge funds in Insider Monkey’s database owned stakes in Kenvue Inc. (NYSE:KVUE), down from 64 in the preceding quarter. These stakes are collectively valued at over $1.3 billion. With nearly 18 million shares, Harris Associates was the company’s leading stakeholder in Q1.
