Author Archives: Passive Income Earner

Will You Buy This Dividend Aristocrat Now Or Wait?

Johnson & Johnson (NYSE:JNJ) recently reported its Q4 and full year results. In 2018, it increased sales by 6.7% to $81.6 billion. Excluding divestitures/acquisitions, sales would have increased by 5.5%

A Business Overview

J&J is a globally diversified healthcare company that operates in three segments:

  1. Consumer, which includes popular brands such as Tylenol, Motrin, Neutrogena, and Aveeno;
  2. Pharmaceutical with Zitiga, Stelara, Tremfya, etc. that were key contributors to growth; and
  3. Medical Devices
Source: Author-generated pie chart with company sales data

The Pharmaceutical segment is the largest and experienced the highest sales growth of 12.4% (compared to 1.8% for Consumer and 1.5% for Medical Devices). The segment experienced market outperformance driven by double-digit growth in 10 key products.

In 2018, about 51% of its sales were in the U.S. and 49% were international (23% in Europe, 18% in Asia-Pacific and Africa, and 7% in the western hemisphere excluding the U.S.).

J&J’s blockbuster portfolio contributed nearly 47% of sales in 2018.

Source: J&J’s Q4 earnings call slides– Slide 22

The company doesn’t stop there, though. It continues to grow its portfolio via research and development (“R&D”), acquisitions and licensing, deals and partnerships, etc. In 2018, it spent about $11 billion in R&D, which was about 13% of sales and aligned with the percentage spent in 2017.

Source: J&J’s Q4 earnings call slides – Slide 23
Read More

Top U.S. Dividend Growth Stocks for January

The U.S. stock market, using SPDR S&P 500 ETF Trust (NYSE:SPY) as a proxy, has bounced about 8% from a low in December. The ETF has some strong resistance at the US$270 range. It needs to break that range and make a new high to indicate that the correction that started in October won’t continue.

technical chart showing SPY bouncing from Dec 2018 low
Source: Stockcharts

Despite the market rebounding, there are still some good-value quality U.S. dividend growth stocks for long-term investing. Here are two out of seven top U.S. dividend ideas I wrote about here in December. They’re still great buys today.

dividend income
Read More

Top Canadian Dividend Growth Stocks for January

Long-term investors should welcome the market correction that we’ve been experiencing. The Canadian market is down by about 11% in the last 12 months, creating opportunities to buy quality stocks at cheaper valuations.

Here are two out of seven top Canadian dividend ideas I wrote about here in December. They’re still excellent buys today. Both businesses actually report in U.S. dollars and trade on the U.S. market as well as on the TSX.

"big data" in text with related text around it, such as "analytics"
Read More