Recently I opened a new position in Johnson & Johnson (ticker: JNJ). I purchased 8 shares for around $ 132 per share. This purchase adds about € 30 to my annual dividend income which now stands at € 1.550.
I opened my position with the following things in mind:
I opened my position with the following things in mind:
- A solid dividend yield of 3%. Historically, this seems to be a decent entry point.
- It has been and still is a great dividend stock. JNJ increased its dividend for almost 60 years. During the last decade the dividend growth hovered around 7% per year.
- The payout ratio of 45% is more than safe.
- The balance sheet of JNJ is solid and the company still is one of the few companies in the world with a triple A credit rating.
- Obviously there are legal issues (J&J must pay $8B in a Risperdal case, but also cases around the U.S. opioid addiction epidemic.). However, this seems to be business as usual for JNJ as they have been in several lawsuits in their long history. Up until now, that has never stopped them from growing their revenues, profits and dividends, so I am not too worried about this now.
I don't expect this purchase to be a "big-hitter" in the sense that it will turn out to be a high growing dividend or share price. I see this purchase as a starter position in my quest to own shares in three dozens of the world's best companies. I believe JNJ is one of them. Depending on the future share price I will add shares on following occasions.
With this quarterly purchase I have completed my buys for this year. I wrote about my goals for 2019 earlier this year.
- Quarter 1: AT&T
- Quarter 2: Unilever
- Quarter 3: Brookfield Renewable Partners
- Quarter 4: Johnson & Johson
Finally, I will buy additional shares in the company where I work. I can buy shares once per year and I submitted a form to double my current position from around € 1.500 to € 3.000. This will add roughtly € 140 to my annual dividend income stream. I will write about this in a future post!
I hope I can increase the frequency of purchases next year (or increase the size of my purchases). I am still enthusiastic about my dividend growth portfolio and am motivated to keep working hard to fuel its growth.
What companies have you bought lately? Are you looking to invest JNJ at its current price?
JNJ seems to be always a good buy, especially at this price. I already have a fairly large position of it, but certainly interesting.
ReplyDeleteWhy don't you buy per month?
Hi Mr. Groeigeld! Yeah I agree. And once JNJ is in my portfolio I feel a have a better grip of when to add to my existing position when the price seems fair.
DeleteI buy each quarterly so I reduce purchase fees. My broker is Lynx btw.
I haven't added to JNJ in a while, other than reinvesting my dividends, but that 3% yield is looking pretty dang good. I'm hoping for a little bit of a market scare to push the yield up to or above 3% before picking up more shares. But there's rarely a bad time to buy JNJ.
ReplyDeleteYeah, I agree that shares are not a total steal at current prices, but as a starter position, it doesn't seem to be really bad spot by any means.
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