Please ensure Javascript is enabled for purposes of website accessibility

Despite Coronavirus Challenges, Johnson & Johnson Boosts Dividend 6.3%

By Joe Tenebruso - Apr 14, 2020 at 2:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The healthcare giant remains a reliable source of income for its shareholders.

Even as many businesses have seen their sales and profits decimated by the coronavirus pandemic, Johnson & Johnson (JNJ -1.10%) has continued to generate solid results.

The healthcare titan's sales rose 3.3% to $20.7 billion in the first quarter. Those gains were driven by a 9.2% jump in consumer health revenue and an 8.7% rise in pharmaceutical sales. Consumer health sales benefited from higher demand for over-the-counter products such as Tylenol, Motrin, and Listerine.

But those improved results were partially offset by an 8.2% decline in medical device revenue, as sales in that segment were dampened by the widespread deferral of non-urgent surgical procedures due to the COVID-19 crisis.

 Johnson & Johnson's adjusted net earnings climbed 8.7% to $6.2 billion. And adjusted EPS, which was boosted by share buybacks, increased 9.5% to $2.30.

Management remains committed to passing a sizable portion of Johnson & Johnson's profits on to shareholders via a steadily growing dividend. The company's board of directors approved a 6.3% increase of its quarterly cash payout to $1.01 per share. That marked J&J's 58th straight year of annual dividend increases, and it places the stock's current yield at a solid 2.8%.

A person in a business suit holding $100 bills in an outstretched arm.

Johnson & Johnson is increasing its cash dividend to investors. Image source: Getty Images.

J&J did, however, lower its full-year guidance due to the expected impact of COVID-19. The company now expects 2020 sales and adjusted EPS to fall roughly 4% and 11%, respectively, down from prior estimates for growth of 4.5% and 4%.

Still, J&J is optimistic that it could help be part of the solution to the coronavirus pandemic. The company is investing more than $1 billion in the development of a COVID-19 vaccine candidate. J&J intends to begin human clinical trials by September, with the hope of obtaining emergency-use authorization from the U.S. Food and Drug Administration by early 2021. 

"With Johnson & Johnson's century-plus history of leading in times of great challenge, we are mobilizing our resources across the company in the fight against the COVID-19 pandemic," Chairman and CEO Alex Gorsky said in a press release.

The company is already ramping up its manufacturing capabilities with the goal of being able to rapidly supply more than 1 billion doses of its candidate vaccine, should it prove effective and safe. 

"Johnson & Johnson is built for times like this, and we are leveraging our scientific expertise, operational scale and financial strength in the effort to advance the work on our lead COVID-19 vaccine candidate," Gorsky said. "We are committed to beginning production at risk imminently and bringing an affordable and accessible vaccine to the public on a not-for-profit basis for emergency pandemic use."

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$165.30 (-1.10%) $-1.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.