3 Dividend Stocks You Can Buy and Hold for Years to Come

NYSE: JNJ | Johnson & Johnson News, Ratings, and Charts

JNJ – The stock market has witnessed significant volatility on worries over a slowing economy amid high inflation and the Fed’s hawkish stance to tame it. As these factors are expected to keep the market under pressure in the near term, it could be wise to invest in fundamentally strong dividend-paying stocks Johnson & Johnson (JNJ), CVS Health (CVS), and AT&T (T). Read on….

Concerns over high inflation, the Fed’s aggressive interest rate hikes, and an economic slowdown have kept the stock market under immense pressure this year. Yesterday, the 10-Year U.S. Treasury yield rose 3.3% after the European Central Bank increased the interest rates by 75 basis points.

Investors are concerned about a possible recession, as policymakers signal to continue raising rates ‘for as long as it takes’ to temper the rising costs. LPL Chief Equity Strategist Jeffrey Buchbinder said, “The combination of peak hawkishness from the Fed and the frustratingly slow pace at which inflation is cooling could make this a tough month.”

As these factors are not expected to subside anytime soon, the stock market will likely remain under pressure. Amid this scenario, investors should consider investing in dividend-paying stocks to help cushion their portfolios and generate a steady income stream.

Therefore, it could be wise to buy and hold quality dividend stocks Johnson & Johnson (JNJ), CVS Health Corporation (CVS), and AT&T Inc. (T) for the years to come.

Johnson & Johnson (JNJ)

JNJ is engaged in research and development, manufacturing, and selling healthcare products, primarily focused on human health and well-being. The company operates through three segments: Consumer, Pharmaceutical, and Medical Devices. It offers its products to the general public, retail outlets and distributors, wholesalers, hospitals, and healthcare professionals.

JNJ’s four-year average dividend yield is 2.60%, and its current dividend translates to a 2.73% yield. Its dividends have grown at a 5.8% CAGR over the past three years and a 5.9% CAGR over the past five years. The company has been paying dividends for 59 consecutive years.

On August 24, 2022, the company received the FDA’s approval for IMBRUVICA® (ibrutinib) for treating pediatric patients with chronic graft-versus-host disease (cGVHD). With this approval, IMBRUVICA became the first FDA-approved therapy for patients with a life-threatening illness.

Susan Stewart, Executive Director of BMT InfoNet, said, “The FDA approval of IMBRUVICA puts another weapon in their arsenal and has the potential to truly make a difference for those who are faced with this challenging disease.”

During the fiscal second quarter (ended June 30, 2022), JNJ’s net sales increased 3% year-over-year to $24.02 billion. Its gross profit rose 2.4% from the year-ago value to $16.10 billion. The company’s non-GAAP net earnings grew 4.3% from the same period last year to $6.91 billion, while its adjusted EPS came in at $2.59, representing a 4.4% increase year-over-year.

Analysts expect JNJ’s revenues to increase marginally year-over-year to $23.58 billion for the fiscal third quarter (ending September 30, 2022). Its EPS is expected to increase 6.7% to $2.27 in the next quarter ending December 31, 2022. The company has surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent.

Shares of JNJ have gained marginally over the past nine months to close the last trading session at $165.39.

JNJ’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has an A grade for Stability and a B for Growth, Value, and Quality. The stock is ranked first of 167 stocks in the Medical – Pharmaceuticals industry. Click here to see the other ratings of JNJ for Momentum and Sentiment.

CVS Health Corporation (CVS)

CVS is a health service provider operating through four segments: Health Care Benefits, Pharmacy Services, Retail/LTC, and Corporate/Other. Its offerings include health & wellness services, health plans, pharmacy services, and prescription drug coverage.

CVS’s four-year average dividend yield is 2.80%, and its current dividend translates to a 2.15% yield. Its dividends have grown at a 2.4% CAGR over the past three years and a 2.2% CAGR over the past five years.

On September 5, 2022, CVS announced the acquisition of Signify Health (SGFY) to advance its long-term strategy of providing value-based care. This acquisition is expected to strengthen the company’s ability to expand and develop new product offerings.

CVS’s total revenue for the fiscal second quarter ended June 30, 2022, increased 11% year-over-year to $80.64 billion. The company’s operating income grew 5.6% year-over-year to $4.57 billion, while its net income rose 6.1% from the year-ago value to $2.96 billion. Also, its EPS increased 6.2% year-over-year to $2.23.

Analysts expect CVS’s EPS and revenue for the quarter ending September 30, 2022, to increase 1.3% and 4% year-over-year to $2 and $76.78 billion, respectively. It has surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 18.6% over the past year to close the last trading session at $102.26.

CVS’s POWR Ratings reflect solid prospects. It has an overall rating of A, translating to a Strong Buy in our proprietary rating system.

It has an A grade for Stability and a B for Growth, Value, and Sentiment. It is ranked #1 of five stocks in the B-rated Medical – Drug Stores industry. Click here to see the other ratings of CVS for Momentum and Quality.

AT&T Inc. (T)

T is a leading global telecommunication, media, and technology service provider. The company operates through three segments: Communication, WarnerMedia, and Latin America.

T’s four-year average dividend yield is 6.91%, and its current dividend translates to a 6.62% yield. The company paid a quarterly dividend of $0.28 on August 1, 2022.

On August 30, 2022, T announced the expansion of its fiber internet services to Arizona. John Stankey, T’s CEO, said, “Fiber is hands-down the best technology to deliver high-speed broadband, and this expansion is allowing AT&T to aggressively roll out service to the Mesa area.”

On August 4, 2022, the company and Warner Bros. Discovery announced an agreement allowing T to continue offering internet and mobility customers access to HBO Max’s original programming and series portfolio. This demonstrates the company’s proven excellence in the field and marks an important step in its continued success.

T’s fiscal second quarter (ended June 30, 2022), net income attributable to T increased 164.8% year-over-year to $4.16 billion. The company’s operating expenses decreased 12.3% from the year-ago value to $24.69 billion. Also, its EPS grew 154.5% year-over-year to $0.56.

The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past six months, the stock has declined 3.4% to close the last trading session at $16.77.

T’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to Buy in our proprietary rating system.

It has a B grade for Value. Among the 20 stocks in the F-rated Telecom – Domestic industry, it is ranked #3. Click here to see the POWR ratings of T for Growth, Momentum, Stability, Sentiment, and Quality.


JNJ shares were trading at $166.14 per share on Friday afternoon, up $0.75 (+0.45%). Year-to-date, JNJ has declined -0.97%, versus a -13.64% rise in the benchmark S&P 500 index during the same period.


About the Author: Shweta Kumari


Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...


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