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The #7 dog of the dow for 2012 is Johnson & Johnson, (Ticker symbol JNJ). JNJ is a multinational pharmaceutical, medical devices and consumer packaged goods company. JNJ is a 176 billion dollar cap company; and had nearly 62 billion in revenue in 2011. JNJ is headquartered in North Brunswick New Jersey. The company was founded in 1887. A neat fact about JNJ is that they registered hundreds of prized domain names during the 1990’s before the real large internet boom.
A theme of most of these Dogs of the Dow has been their stock history with growth. JNJ had extensive growth from 1984 to 2002, where the stock went from around 2 dollars a share to 65 dollars a share. The stock is still at that price today. Since 2002, JNJ has mostly stayed in the 60-65 dollar range, minus a period in 2003-2004 and the 2009 crash.
Though JNJ has not shown any real growth in the last 10 years, it has shown significant dividend growth during this time. In 2002, the quarterly dividend was 18 cents a quarter and today it is 57 cents a share.
As mention above, JNJ has continually increased their dividend for over the last couple decades. The current quarterly dividend is 57 cents a share. Its current dividend yield is 3.50%. I fully expect that JNJ will keep their dividend solid at this value and more than likely even increase this dividend before the end of 2012.
JNJ’s earnings were reported at $4.80 for 2011 and projected to be $5.11 for 2012 and $5.44 for 2013. This is a company that is continuing to grow, after a year of beating earnings every quarter. All of this equates to an average P/E ratio of just under 13. Forward PE for 2012 is looking closer to 12 at the current projections.
My unofficial estimate is that JNJ will hold pretty steady as one of the Dogs of the Dow. This Dog of the Dow will be at $68 a share by the end of the year, and the quarterly dividend will pay you 2.28 or maybe even a little more for the year. JNJ’s growth numbers look strong, but the stock did not break through even with consistently beating earnings in 2011. This stock will continue to provide solid earnings for the next many years, and could be a great buy and hold stock. I just would not expect a large breakthrough gain from JNJ.
Disclosure: I currently do not own any shares of JNJ nor do I plan to purchase any in the near future.
Go back to my original post for 2012 Dogs of the Dow. 2012 Dogs of the Dow
Originally published March 3, 2012.
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