One of the worst mistakes an investor can make is falling in
love with a stock. Just because an
investment has worked out in the past doesn’t mean that the company will
continue to produced earnings and revenue numbers that drive the share price
higher. This type of thinking can blind
an investor to the current business performance, which could lead to a sharp
decline in share price.
Along those same lines, there is no guarantee that a company
with a lengthy dividend track record will continue to pay and raise its
dividend indefinitely. If earnings were
to decline sharply, the company’s ability to pay an increasing dividend might
disappear.
That being said, there are a small group of companies that
have managed to continuously increase earnings per share while also raising the
dividend at impressive levels for lengthy period of times. These types of investment can be rightly
labeled as a “Forever Stocks”.
One company that I feel deserves this ranking is Johnson
& Johnson (JNJ). This article will
look at Johnson & Johnson’s earnings history, recent financial results,
dividend history, and valuation to determine if now is an appropriate time to
purchase shares of this company.