1 Strong Dividend Stock You Can Buy Right Now

Bank certificates of deposit and savings accounts pay almost nothing in interest right now. Fortunately, investors on the hunt for income don't need to gamble on the riskiest stocks out there.

Aug 29, 2014 at 3:33PM

Dividend investing is all the rage these days, and for good reason. With the S&P 500 Index sitting near an all-time high, dividends offer valuable downside protection. When the market goes down, dividends help provide a real return. And when the market goes up, dividends are simply icing on the cake.

Plus, with interest rates at historic lows, it's hard to find satisfactory yield. Bonds don't yield much, with the 10-Year U.S. Treasury at just 2.4%. Traditional savings vehicles like bank certificates of deposits and savings accounts are even worse, as many offer little or no interest.

This makes it difficult to find a decent yield without taking some risk. Fortunately, there are still stocks that fit the bill. One of them is healthcare behemoth Johnson & Johnson (NYSE:JNJ), which is a great dividend stock you can buy today.

Taking advantage of changing demographics
The United States is currently in a massive demographic shift. The country has an aging population, and this will result in high demand for health care going forward. To emphasize, consider that polling firm Gallup has calculated that Baby Boomers, or those born roughly between 1946-1964, are the largest generational group in the United States. By themselves, Baby Boomers represent about one-third of the total population.

J&J's huge and diverse businesses should capitalize on this demographic trend. In all, J&J holds more than 275 companies spread across more than 60 countries worldwide.

These companies are all contributing to the overall success J&J has experienced this year. Total sales are up 6.3% through the first half of the year. Organic sales are up an even better 7.4%, once you strip out the effects of foreign currency translation. Through the first six months, adjusted earnings per share increased 9.5%.

J&J's strong results are spread across its domestic and international markets. Organic sales are up 8.5% in the United States over the first half of the year, and 6.4% internationally over this period. The company is doing well in under-developed nations as well. For example, its international performance was led by Asia-Pacific and Africa, where sales rose 7.7% over the first six months.

What J&J can do for you
J&J is a 128-year old company that has an amazing track record of success. According to the company, it has increased adjusted profits for 30 years in a row, and has raised its dividend for 52 years in a row. Speaking of its dividend, J&J yields 2.7%, which beats the yield on the 10-Year U.S. Treasury and the overall stock market index.

Even better, J&J isn't aggressively valued. The company increased its full-year earnings forecast after providing second-quarter results. Management now expects to earn $5.89 in adjusted EPS this year, which would represent nearly 7% growth year over year.

Pharmaceuticals is helping drive that growth, led by autoimmune drug Remicade (which turned in 8% sales growth). In the consumer business, growth will be fueled by J&J's stable consumer business, which includes popular brands such as Tylenol and Listerine.

The Foolish takeaway
As stock markets climb and interest rates remain low, yield is hard to find. But you don't need to reach for the riskiest stocks to generate income from your investments. A great stock that offers a large and highly profitable business, in tandem with a strong dividend, is healthcare giant Johnson & Johnson.

J&J operates several large businesses that each contribute to growth. In turn, the company does a great job of sharing its success with investors. And, with the aging population in the United States, J&J has a bright future ahead.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks -- like Johnson & Johnson -- simply crush their non-dividend paying counterparts over the long term. That’s beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now.

Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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