The combined concerns around looming interest rate increases, deepening supply chain disruptions and rising oil prices with increasing economic sanctions on Russia have been fostering immense stock market volatility. And if Washington and European allies cease importing oil from Russia, oil prices could skyrocket and with potentially catastrophic economic consequences worldwide.

Therefore, we think investors looking to generate a steady income stream could invest in dividend aristocrats in defensive sectors. TheProShares S&P 500 Dividend Aristocrats ETF’s (NOBL) 10.1% gains over the past year have surpassed the SPDR S&P 500 Trust ETF’s (SPY) 9.3% returns.

Defensive stocks Johnson & Johnson (JNJ), The Procter & Gamble Company (PG), PepsiCo, Inc. (PEP), Abbott Laboratories (ABT), and Becton, Dickinson and Company (BDX) have impressive dividend payout histories. Therefore, these stocks could be good bets for income investors now.

Johnson & Johnson (JNJ)

JNJ develops, manufactures, and sells health care products and provides related services. The New Brunswick, N.J., company serves primarily the consumer, pharmaceutical, and medical devices and diagnostics markets and distributes its products through retail outlets and distributors, wholesalers, hospitals, and health care professionals for prescription use. It has a 0.71 beta.

JNJ paid a $1.06 per share quarterly cash dividend on March 8, 2022. The stock pays a $4.24 per share dividend annually, translating to a 2.50% yield. Its dividend has grown at a 5.79% rate over the past five years. JNJ has paid dividends for 59 consecutive years.

On Feb. 28, 2022, the U.S. Food and Drug Administration (FDA) approved JNJ’s Janssen Pharmaceutical Companies’ CARVYKTI to treat adults with relapsed or refractory multiple myeloma (RRMM) after four or more prior lines of therapy. Developed in collaboration with Legend Biotech USA, Inc. (LEGN), a global, clinical-stage biotechnology company that develops and manufactures novel therapies, the pivotal CARTITUDE-1 study resulted in deep and durable responses, with 98% of patients with RRMM responding to therapy. This approval should help JNJ drive its sales and gain wider recognition across the industry going forward.

For its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, JNJ’s sales came in at $24.80 billion, representing a 10.4% year-over-year improvement. The company’s gross profit was $16.85 billion, up 14.9% from the prior-year period. Its pre-tax income came in at $4.74 billion for the quarter, indicating a 193.6% year-over-year improvement. While its adjusted net earnings increased 14.4% year-over-year to $5.68 billion, its adjusted EPS rose 14.5% to $2.13. The company had $36.22 billion in cash and cash equivalents as of Dec. 31, 2021.

Analysts expect JNJ’s EPS to improve 0.8% year-over-year to $2.61 for its fiscal year 2022 first quarter, ending Dec. 31, 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $23.77 billion consensus revenue estimate for the same fiscal year represents an 8.1% rise from the prior-year period. And the company’s EPS is expected to grow at a 6.1% rate per annum over the next five years.

Over the past nine months, the stock has gained 2.1% in price and closed yesterday’s trading session at $172.21. JNJ’s trailing-12-month gross profit margin, ROE, and ROTC are 68.3%, 30.4%, and 15.1%, respectively.

JNJ’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has an A grade for Stability and a B grade for Value, Sentiment, and Quality. Click here to see the additional ratings for JNJ’s Momentum and Growth.

JNJ is ranked #2 of 178 stocks in the Medical – Pharmaceuticals industry.

Click here to checkout our Healthcare Sector Report for 2022

The Procter & Gamble Company (PG)

Founded in 1837, PG in Cincinnati, Ohio, provides branded consumer packaged goods to consumers worldwide. The company operates in five segments—beauty; grooming; health care; fabric & home care; and baby, feminine & family care. Its products are sold through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, and department stores. The stock has a 0.45 beta.

PG paid an $0.87 per share quarterly cash dividend on Feb. 15, 2022. The stock pays a $3.48 per share dividend annually, translating into a 2.24% yield. Its dividend has grown at a 5.37% rate over the past five years. PG has paid dividends for 131 consecutive years.

On March 3, 2022, PG’s P&G Ventures reintroduced Bodewell, a line of uniquely designed skin care products for people with eczema and psoriasis. Bodewell products gently help soothe irritated skin and help skin rebalance itself over time. Bodewell should witness high demand for the product in the coming months.

For its fiscal year 2021 second quarter, ended Dec. 31, 2021, PG’s net sales increased 6.1% year-over-year to $20.95 billion. The company’s EBIT came in at $5.24 billion, indicating a 7.4% year-over-year improvement. Its net earnings were  $4.22 billion, up 9.6% from the prior-year period. And PG’s EPS increased 12.9% year-over-year to $1.66. As of Dec. 31, 2021, the company had $11.54 billion in cash and cash equivalents.

The $1.31 consensus EPS estimate for its  fiscal year 2022 third quarter, ending March 31, 2022, represents a 3.7% year-over-year improvement. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Analysts expect the company’s revenue to be $18.75 billion for the same quarter, indicating a 3.5% rise from the prior-year period. PG’s EPS is expected to grow at a 7.1% rate per annum over the next five years.

PG stock has gained 14.1% in price over the past nine months and ended yesterday’s trading session at $152.84. Its trailing-12-month gross profit margin, ROE, and ROTC are 49.4%, 31.1%, and 14.4%, respectively.

PG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.

It has a B grade for Stability, Sentiment, and Quality. Click here to see the additional ratings for PG (Momentum, Growth, and Value).

PG is ranked #11 of 62 stocks in the Consumer Goods industry.

PepsiCo, Inc. (PEP)

PEP in Harrison, N.Y., manufactures or uses contract manufacturers, markets, and sells a variety of grain-based snacks, carbonated and non-carbonated beverages, and foods worldwide. It markets its products through a network of direct-store-delivery, customer warehouse, distributor networks, as well as through e-commerce platforms and retailers. It has a 0.65 beta.

PEP will pay a $1.08 quarterly cash dividend on March 31, 2022. The stock pays a $4.30 per share dividend annually, translating to a 2.59% yield. The company’s dividend has grown at a 7.39% rate over the past five years. PEP has paid dividends for 49 consecutive years.

On Feb.23, 2022, PEP introduced Nitro Pepsi, the first-ever nitrogen-infused cola that is softer than a soft drink. The drink has a creamy, smooth, mesmerizing cascade of tiny bubbles topped off by a frothy foam head. The company has launched Nitro Pepsi in Draft Cola and Vanilla Draft Cola flavors. PEP should witness good demand for the new product in the coming months.

For its fiscal year 2021 fourth quarter, ended Dec. 25, 2021, PEP’s net sales increased 12.4% year-over-year to $25.25 billion. The company’s non-GAAP gross profit came in at $13.19 billion, up 9.9% from the prior-year period. PEP’s non-GAAP net income was  $2.13 billion, indicating a 4.4% year-over-year improvement. Its non-GAAP EPS increased 4.1% year-over-year at $1.53. The company had $5.60 billion in cash and cash equivalents as of Dec. 25, 2021.

The $1.23 consensus EPS estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents a 1.7% rise from the prior-year period. PEP surpassed the Street’s EPS estimates in each of the trailing four quarters. Its revenue is estimated to be $15.59 billion for the same quarter, indicating a 7.1% year-over-year improvement. Analysts expect the company’s EPS to grow at a 7.7% rate per annum over the next five years.

Over the past nine months, the stock has gained 53.4% in price to close yesterday’s trading session at $162.45. PEP’s trailing-12-month gross profit margin, ROE, and ROTC are 53.4%, 51.7%, and 12.5%, respectively.

PEP’S POWR Ratings reflect its solid prospects. It has an overall B rating, which equates to Buy in our proprietary rating system.

The stock has a B grade for Stability and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for PEP’s Value, Sentiment, Growth, and Momentum here.

PEP is ranked #14 of 37 stocks in the B-rated Beverages industry.

Abbott Laboratories (ABT)

ABT discovers, develops, and sells healthcare products focused on cardiovascular, diabetes care, diagnostics, neuromodulation, nutrition, and medicine. The Abbot Park, Ill., company’s products are sold directly to wholesalers, distributors, government agencies, health care facilities, pharmacies, and independent retailers. It has a 0.75 beta.

ABT will pay a $0.47 quarterly cash dividend on May 16, 2022. The stock pays a $1.88 per share dividend annually, translating to a 1.55% yield. The company’s dividend has grown at an 11.74% rate over the past five years. PEP has paid dividends for 50 consecutive years.

On Feb. 21, 2022, the U.S. FDA approved an expanded indication for ABT’s CardioMEMS HF System to support the care of an additional 1.2 million U.S. patients living with heart failure. The sensor wirelessly transmits daily pressure readings to a patient’s clinical team and provides an early warning system enabling them to protect against worsening heart failure. ABT should witness expanding market reach for this sensor in the coming months.

For its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, ABT’s net sales increased 7.2% year-over-year to $11.47 billion. The company’s non-GAAP gross profit came in at $6.62 billion, representing a 5.8% rise from the prior-year period. It had $9.80 billion in cash and cash equivalents as of Dec. 31, 2021.

The $1.48 consensus EPS estimate for its  fiscal year 2022 first quarter, ending March 31, 2022, indicates a 12.1% year-over-year improvement. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Analysts expect the company’s revenue to reach $11.04 billion for the same quarter, representing a 3.3% improvement from the year-ago period. ABT’s EPS is expected to grow at a 12.1% rate per annum over the next five years.

Over the past nine months, the stock has gained 8.1% and ended yesterday’s trading session at $118.86. ABT’s trailing-12-month gross profit margin, ROE, and ROTC are 58.1%, 20.5%, and 10.7%, respectively.

ABT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

It has a B grade for Growth, Sentiment, Quality, and Stability. Click here to see the additional ratings for ABT (Value and Momentum).

ABT is ranked #4 of 166 stocks in the Medical – Devices & Equipment industry.

Click here to checkout our Healthcare Sector Report for 2022

Becton, Dickinson and Company (BDX)

BDX develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products for healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public worldwide. The Franklin Lakes, N.J., company operates through three business segments–BD Medical; BD Life Sciences; and BD Interventional. It has a 0.66 beta.

BDX will pay an $0.87 per share quarterly cash dividend on March 31, 2022. The stock pays a $3.48 per share dividend annually, translating into a 1.26% yield. Its dividend has grown at a 4.39% rate over the past five years. BDX paid dividends for 49 consecutive years.

On Feb. 1, 2022, BDX completed the acquisition of Cytognos, a Spain-based privately held company that specializes in flow cytometry solutions for blood cancer diagnosis, minimal residual disease (MRD) detection, and immune monitoring research for blood diseases. The acquisition accelerates BDX’s strategy to support chronic disease management by expanding its portfolio of blood cancer diagnostics, immune assessment tests, and informatics to address patient, clinician, and care provider needs, expand data analytics capabilities and help in the timely treatment of patients.

As of Dec. 31, 2021, the company had $1.90 billion in cash and equivalents. BDX surpassed the consensus EPS estimates in each of the trailing four quarters. The company’s EPS is expected to grow at a 6% rate per annum over the next five years.

BDX has gained 15.2% in price over the past nine months and ended yesterday’s trading session at $276.05. Its trailing-12-month gross profit margin, ROE, and ROTC are 46.7%, 7.2%, and 4.5%, respectively.

BDX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.

It has a B grade for Growth and Stability. Click here to see the additional ratings for BDX (Value, Momentum, Quality, and Sentiment).

BDX is ranked #33 in the Medical – Devices & Equipment industry.

Click here to checkout our Healthcare Sector Report for 2022

JNJ shares were trading at $170.83 per share on Tuesday morning, down $1.38 (-0.80%). Year-to-date, JNJ has gained 0.50%, versus a -12.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...

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