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Here's Why Johnson & Johnson Is a Stock You Can Buy and Hold Forever

By Rachel Warren – Sep 29, 2021 at 8:00AM

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Investors searching for dependable returns should take a second look at this household name.

Johnson & Johnson (JNJ 0.08%) is hardly a new name to most. The company's stability and resilience in a variety of market conditions have revealed its true staying power for long-term buy-and-hold investors. In this segment of Backstage Pass, recorded on Sept. 20, 2021, Fool contributor and new investor Rachel Warren shares why she chose Johnson & Johnson as one of her first 10 stock buys. 

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Rachel Warren: So another great healthcare stock that I write about often. For me, like with these other big pharma companies. J&J, it's one of the oldest pharmaceutical companies around. It's been around for about a 135 years now. And, it's not one of those companies that is going to supercharge your portfolio overnight. 

But the thing that I love about it, and I think a lot of investors do, is it delivers that slow and steady and consistent growth in a variety of markets. It's one that you can really depend on for that. It does also pay a nice dividend, and it qualifies as a Dividend King, because it has consecutively every year raising its dividend for more than 50 years. It's current dividend is about 2.6%, last time I checked. 

Also, above the S&P 500's average. I think people mainly know J&J for their consumer health products. You've got those brands that everyone has in their house: Johnson's, Aveeno, Tylenol, Motrin. But I think that's actually something that's a big draw for a company if you look at it as a potential investor from the perspective of a consumer. You know, is this a company that like people use their products daily, are their products consistently in demand? 

That can be a really good indicator of whether a company is going to have real staying power in your portfolio. The company has not generally reported super-high annual earnings growth.

Generally it's more of those slow, steady growth returns. It was a little under 1% sales growth in 2020, and then continuing on that into 2021.

Rachel Warren owns shares of Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$178.88 (0.08%) $0.14

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