Johnson & Johnson (NYSE:JNJ)
As with many fund managers, Blackrock’s dividend gem is Johnson & Johnson (NYSE:JNJ). With an annualized dividend payment of $2.40 per share, which has grown by an average annual rate of 7.5% within the last 4 years, a double-digit profit margin, and revenue growth of 8%, JNJ has proved its dividend income prowess. It has recently grown its net operating cash flow by 7.7% and has been surpassing earnings estimates during at least the last 4 quarters. And it looks like the robust rally in the stock price will continue as the company gets the nod from the FDA on its Type 2 diabetes drug. The disease is the most common variety, affecting about 24 million people. The first-of-its-kind drug only spells growth for this leading pharmaceutical company.
Oracle Corporation (NASDAQ:ORCL)
Oracle Corporation (NASDAQ:ORCL) could hardly go unnoticed by dividend income seekers for its over 40% average growth in dividend payments during the last three years. With high profitability, a net margin (ttm) of 28.45%, a low payout ratio based on cash flow of 8.8%, and a P/E ratio of 15.04 that shows a notable allowance for value appreciation, Oracle Corporation (NASDAQ:ORCL) remains an attractive addition to an investor’s portfolio. In fact, investors should take advantage of the recent plunge in the stock price as the company is poised to recover soon. The earnings for the quarter ending in May have been revised downward twice, but upward four times. The company’s net operating cash flow increased by a remarkable 22% in 2012, and so did its free cash flow, which stands at $11.89 billion for 2012. With this, Oracle Corporation (NASDAQ:ORCL) is currently boosting its communication segment after making a $2.1 billion acquisition of Acme Packet during the previous month and Tekelec for a still undisclosed amount. Tekelec is a provider of network signaling, subscriber data management, and policy control solutions for communications networks. This technology is the one being utilized by hundreds of customers in 100 countries across the world.
The Procter & Gamble Company (NYSE:PG)
The Procter & Gamble Company (NYSE:PG) pays a high annualized dividend of $2.21 per share. The company was able to grow this at an average growth rate of 9.3%. This popular dividend stock continues to pose double-digit profit margin and ROE. Its quarterly revenue has grown by about 2% year-over-year; in fact, it has consistently exceeded earnings expectations in all four quarters of 2012. However, the payout ratio based on cash flow at 46.2% is bordering the 50% mark. Its core business may have grown in 2012, as shown by the 0.4% growth in its net operating cash flow, but if the company intends to uphold its good reputation in dividend growth for the long term it has to do more than this.
A quick look at Blackrock’s dividend stocks provides a diverse set of dividend investment ideas that one can consider. If you do not have these yet in your portfolio, it is time to seriously consider them. I would take JNJ without question for its huge growth potential.
The article Top Dividend Stocks Chosen by Blackrock Advisors originally appeared on Fool.com and is written by Aubrey Tabuga.
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