5 Quality Stocks With Dividend Yields Over 2%

1. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 83
Dividend Yield as of September 22: 2.72%

Johnson & Johnson (NYSE:JNJ) is an American multinational pharmaceutical company that also specializes in other household and consumer products. On September 14, the company’s board announced the authorization of a buyback program for stock worth $5 billion. This was attributed to the company’s strong free cash flow and lowest levels of debt in five years. In Q2 2022, the company generated $4.7 billion in free cash flow, up from $3.37 billion in the previous quarter.

Johnson & Johnson (NYSE:JNJ) holds one of the strongest dividend growth track records in the US market, raising its payouts for 60 years consistently. The company currently pays a quarterly dividend of $1.13 per share, with a dividend yield of 2.72%, as recorded on September 22.

In July, SVB Securities maintained its Outperform rating on Johnson & Johnson (NYSE:JNJ) with a $194 price target, as the demand for the company’s key products and segments gain momentum. Moreover, the firm also appreciated the management’s effort to keep costs in check.

As of the close of Q2 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Johnson & Johnson (NYSE:JNJ), with a total value of over $6.7 billion. In the previous quarter, 83 hedge funds owned stakes in the pharmaceutical company as well, worth over $7.4 billion.

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…”

You can also take a look at 10 Dividend Stocks That Raised Their Dividends in 2022 and 10 Dow Jones Dividend Stocks With Over 1% Yield

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