Healthcare is an evergreen industry, meaning it will always be around. People will always need care, and naturally, they will strive for newer and better medicines and technologies to provide it. That idea makes healthcare a great space in which to look for dividend stocks.
Industry titans like Johnson & Johnson (NYSE: JNJ), AbbVie (NYSE: ABBV), and UnitedHealth Group (NYSE: UNH) stand out for their leadership in pharmaceuticals, medical technology, and insurance.
Want decades of dividends you can count on? Do you want companies that raise their dividends every year? Here is why you can count on each of these companies to deliver just that.
This Dividend King is on sale
Johnson & Johnson has paid and raised its dividend for 62 consecutive years, making it part of a select club called the Dividend Kings. The diversified healthcare conglomerate sells pharmaceuticals, medical devices, and various other products worldwide through its two units: Innovative Medicine and MedTech. Johnson & Johnson’s strong brand and diverse products are always in demand, which is the secret to the stock’s years of consistency.
Additionally, a disciplined leadership team takes excellent care of Johnson & Johnson’s financials. The company is famous for having the highest credit rating available — higher than the U.S. government’s credit rating — and it’s one of just two public companies to have it. A healthy dividend payout ratio that’s only 47% of Johnson & Johnson’s estimated 2024 earnings keeps the dividend in check.
The stock offers a solid blend of income and growth. The starting yield is 3.3% today, and management has raised the dividend by an average of 5.7% over the past three years.
Unfortunately, lawsuits regarding Johnson & Johnson’s talcum baby powder cast shadows on the stock. That’s why shares trade at just 14 times earnings today, despite the company’s track record and quality. The lawsuits will likely cost billions of dollars in eventual settlements, but they shouldn’t threaten the dividend, since settlement payments generally pay out over many years. This could be an…
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