Equity markets have experienced significant volatility this year, and given broader macroeconomic conditions, including rising oil prices, trade wars, and actual wars, things might not fully settle down anytime soon. In this environment, it's a great idea to invest in dividend stocks. Not only do consistent dividend payers tend to have robust businesses capable of navigating challenging economic times, but their regular payouts can also help smooth out market losses.
However, not all dividend companies are created equal. Let's consider one that stands out above the rest: Johnson & Johnson (JNJ +1.51%).
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An incredibly rare track record
Johnson & Johnson is part of a group known as Dividend Kings, which are corporations with 50 or more consecutive annual payout increases. Every single member of this clique is impressive in its own right, but Johnson & Johnson stands out even among its amazing peers. The company has increased its dividends for 63 straight years. There are very few companies with a longer streak. True, just because Johnson & Johnson has an impressive past of consistently hiking its dividend doesn't mean it will continue doing so.
But a look at the company's underlying operations and long-term prospects strongly suggests it has what it takes to maintain its streak. Johnson & Johnson's pharmaceutical business boasts a vast portfolio of medicines across some of the largest therapeutic areas, including immunology and oncology. The company markets many drugs with annual sales that top $1 billion. And thanks to a diversified lineup, it is more than capable of bouncing back when it encounters patent cliffs, as it did last year when biosimilars for Stelara -- an immunosuppressant -- entered the U.S. market.
NYSE: JNJ
Key Data Points
Johnson & Johnson also projected that its sales will grow this year and reach $100 billion, marking only the second time a biopharma company has achieved this milestone. Johnson & Johnson will do so despite the impact of government-led price negotiations that will lead to lower sales for some of its products. Meanwhile, the company's deep pipeline should help it unearth more gems over time.
Then, there is Johnson & Johnson's medical device business, which is also fairly diversified. The healthcare leader recently requested approval for the Ottava robotic-assisted surgery system, a device that will help it establish a presence in an underpenetrated and promising robotic surgery niche. Lastly, Johnson & Johnson is in excellent financial health. The company's AAA rating from S&P Global, the highest rating available, provides evidence of that.
Johnson & Johnson should handle challenging times just fine, especially as it sells products nobody will want to stop buying no matter what the economy is doing. And in the long run, Johnson & Johnson's innovative capabilities and consistent R&D investments should enable it to perform well while continuing to raise its dividends.
