Dividend Stock Portfolio: 5 Stock Picks by Hedge Funds

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Dividend Yield as of November 10: 2.61%

Johnson & Johnson (NYSE:JNJ) is one of the world’s largest healthcare companies that has been operating for 130 years with 130,000 employees currently working across the globe. For dividend investors, it would be interesting to know that the New Jersey-based company is part of the 2021 Dividend Aristocrats list. This is a list of 65 companies that have been increasing their dividend payout annually for at least the past 25 consecutive years. Johnson & Johnson (NYSE:JNJ) has been increasing its dividend for the past 59 consecutive years.

The company is at the forefront in response to the COVID-19 pandemic. On November 10, the company entered into an agreement with the US government and the Vaccine Alliance, Gavi to provide its single-shot vaccine to the most vulnerable people worldwide through the COVAX Humanitarian Buffer. In addition to this, the company received approval for its booster shots by the US Food and Drug Authority (FDA) on October 20.

Johnson & Johnson (NYSE:JNJ) was mentioned in the Q2 2021 investor letter of Distillate Capital. Here’s what the investment management firm said:

“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”

Johnson & Johnson (NYSE:JNJ) can be considered as a defensive stock with a global footprint and growing dividends. The company’s gross profit margin has been above 70% for the past four years and the operating earnings have grown for the past 35 consecutive years. Furthermore, the company has invested $50 billion since 2017 to acquire other companies for top-line and bottom-line growth.