5 Best Defensive Stocks to Buy According to Ray Dalio

2. Johnson & Johnson (NYSE:JNJ)

Bridgewater Associates’ Stake Value: $769,086,000 

Percentage of Bridgewater Associates’ 13F Portfolio: 3.25%

Number of Hedge Fund Holders: 83

Insider Monkey spotted Johnson & Johnson (NYSE:JNJ) on 83 hedge fund portfolios. The total stakes of these hedge funds amounted to $6.76 billion. Of those, $769 million were of Bridgewater Associates. The investment covers 3.25% of Ray Dalio’s 13F portfolio.

Johnson & Johnson (NYSE:JNJ) is a dividend king. The company has been growing its dividends for roughly 60 years. As of September 21, the stock is offering a forward dividend yield of 2.74% which the company supports with free cash flows of $19.95 billion. On September 14, Johnson & Johnson (NYSE:JNJ) announced a share repurchase program of up to $5 billion.

On July 20, SVB Securities analyst David Risinger revised his price target on Johnson & Johnson (NYSE:JNJ) to $194 from $200 and reiterated a buy-side Outperform rating on the shares. On July 21, UBS analyst Kevin Caliendo adjusted his price target on the stock to $180 from $185 and maintained a Neutral rating on the shares.

Here is what Mayar Capital had to say about Johnson & Johnson (NYSE:JNJ) in its second-quarter 2022 investor letter:

“J&J is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.

Here’s how JNJ make and spend a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics.

To make that dollar, however, JNJ typically spends about 25 cents to make the products themselves and another 27 cents on marketing and general administrative functions. This leaves JNJ with about 48 cents on the dollar in profit…” (Click here to see the full text)