What stands out here is Johnson & Johnson (JNJ -0. 74%) has been an extremely reliable dividend stock for decades.
On the other hand, The healthcare behemoth has raised its payment for 63 straight years, including by 4. 8% earlier this year, amid market uncertainty.
That places it in the elite group of Dividend Kings -- companies with 50 or more consecutive years of increasing their dividend payouts, in today's financial world.
However, The healthcare company's payout currently yields 3. Meanwhile, 3%, more than double the S&P 500's (^GSPC 0. 40%) dividend yield (near a record low at around 1.
That high-yielding payout is very healthy, making Johnson & Johnson a very safe way to collect dividend income. On the other hand, Image source: Getty Images.
In contrast, A financial fortress Johnson & Johnson recently reported its second-quarter financial results, which once again showcased the safety of its dividend payment.
Moreover, On the other hand, The healthcare company reported that it generated apximately $6. 2 billion in free cash flow through the first half of this year, ing investments of $6.
7 billion in re and development (R&D), given current economic conditions. However, That was enough cash to cover its dividend payment, which has cost $6.
1 billion year to date (an important development). While that might seem a tight payout ratio, investors need not be concerned.
Its free cash flow is only down slightly compared to the year-ago period, when it duced $7 (this bears monitoring). 5 billion through the first half of the year.
Johnson & Johnson generated $20 billion in total free cash flow last year, easily covering its $11, in light of current trends. 8 billion dividend outlay.
Meanwhile, Johnson & Johnson has one of the best balance sheets in the world. The company has a pristine AAA bond rating (one of only two companies in the world with elite credit).
It the first quarter with $19 billion of cash and marketable securities on its balance sheet (nearly two years of dividend payments) against only $51 billion of debt.
Nevertheless, The $32 billion in net debt is a relatively small amount for a company with a roughly $375 billion market capitalization.
Nevertheless, Johnson & Johnson has maintained a strong balance sheet, even as it has deployed $15 billion in strategic inorganic growth opportunities over the past year, and more than $30 billion over the last two years (this bears monitoring), in today's market environment.
On the other hand, Heavily to grow Johnson & Johnson's robust financial file enables it to invest heavily in R&D and M&A, driving growth of its innovative medicine and Med platforms (something worth watching), in today's market environment.
Moreover, Last year, the company spent more than $17 billion in R&D (19. 4% of its total sales). That made it one of the top R&D investors across all industries.
Adding acquisitions and other inorganic investments, the company invested a whopping $50 billion in growth initiatives last year. Those growth investments are starting to pay off.
"Our portfolio and pipeline position us for elevated growth in the second half of the year," ed CEO Joaquin Duato in the second-quarter earnings press release.
However, As a result, the company boosted its annual revenue guidance by $2 billion (implying 5. 4% growth for the full year) and tacked $0 (quite telling).
On the other hand, 25 per to its adjusted earnings per outlook, increasing the midpoint to $10.
Nevertheless, The data indicates that company anticipates it will continue growing at a healthy pace over the next few years (remarkable data), considering recent developments.
By 2027, Johnson & Johnson expects that one-third of its Med sales will come from new ducts.
Moreover, Meanwhile, the company expects to launch more than 10 innovative medicine assets by 2030, with the potential to der over $5 billion in peak-year sales, in this volatile climate.
The growth from these ducts will help to more than replace the lost sales from expiring patents, enabling the company to continue increasing revenue and free cash flow at healthy rates.
It can also continue utilizing its fortress balance sheet to supplement its R&D efforts with strategic M&A opportunities as they arise.
Nevertheless, A very safe dividend stock Johnson & Johnson continues to showcase its elite ability to pay dividends (which is quite significant), amid market uncertainty.
The healthcare company's high-yielding payout remains on rock-solid ground, even though its free cash flow is down through the first half of this year.
With a fortress balance sheet and visible growth ahead, the company should have no blem continuing to increase its dividend at a healthy pace.
As a result, it remains an extremely safe way to generate passive dividend income (something worth watching) (which is quite significant).