A Dividend Stock Worth Owning Forever?
One of the main reasons I like blue-chip dividend stocks is
that they’re great for retirement investors. In an era when savings accounts
pay next to nothing, a reliable stream of dividends can go a long way toward
helping folks enjoy their golden years.
One company that has done a fantastic job on the dividend
front is Johnson & Johnson (NYSE:JNJ). In fact, because of JNJ stock’s
strong share-price performance, not only has it provided reliable passive
income, but it has also allowed some investors to retire early. Over the past
20 years, the total return from Johnson & Johnson stock is over 450%.
Obviously, that massive return also means JNJ stock is more
expensive than before. Indeed, from a valuation perspective, Johnson &
Johnson stock isn’t cheap compared to its past or its peers.
But there are still very good reasons to consider JNJ stock
for a retirement portfolio.
First, Johnson & Johnson stock yields 2.4%. That’s not
only better than what you get from any savings account these days, but also
higher than the average dividend yield of all S&P 500 companies, which is
1.3% at the moment. (Source: “S&P 500 Dividend Yield,” multpl.com, last
accessed August 27, 2021.)
Second, JNJ stock pays increasing dividends, so investors
who buy shares today can look forward to earning higher yield on cost in the
years ahead.
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