5 Best Dividend Stocks to Buy According to Thomas Bailard’s Hedge Fund

2. Johnson & Johnson (NYSE:JNJ)

Bailard Inc.’s Stake Value: $23,394,000

Johnson & Johnson (NYSE:JNJ) is one of the most popular names in Big Pharma. The company was a part of 83 hedge fund portfolios in Q2 2022, the same as in the previous quarter, according to Insider Monkey’s data. The stakes owned by these funds hold a consolidated value of over $6.7 billion.

Bailard Inc. resumed its position in Johnson & Johnson (NYSE:JNJ) during the first quarter of 2016, after selling its stake worth $3.2 million in the third quarter of 2015. In a recent quarter, the hedge fund owned 131,790 JNJ shares, valued at nearly $23.4 million. The company constituted 0.92% of the firm’s 13F portfolio.

Johnson & Johnson (NYSE:JNJ) pays a quarterly dividend of $1.13 per share, growing it by 6.6% in April. This marked the company’s 60th consecutive year of dividend growth. As of August 31, the stock’s dividend yield came in at 2.80%.

In July, SVB Securities maintained its Outperform rating on Johnson & Johnson (NYSE:JNJ) as the underlying demand for its key products remained strong and the management is focusing on controlling costs.

Mayar Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter. Here is what the firm has to say:

“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)