4 Top Dividend Aristocrats to Add to Your Retirement Portfolio

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

JNJ – Amid the current market volatility on concerns over rising inflation, we think it is wise to invest in the shares of dividend aristocrats, given their long history of increasing dividends. Johnson & Johnson (JNJ), Target (TGT), Becton Dickinson (BDX), and Emerson Electric (EMR) are examples of companies that have consistently increased their dividend payments for more than 40 years. So, we think betting on these stocks will likely ensure a steady stream of income. Read on.

Stronger-than-expected labor-market-data drove the stock market higher yesterday, but investors are skeptical about President Biden’s proposed global minimum corporate tax rate of 15%, and inflation concerns are expected to contribute to their discomfort. Therefore, the market is far from being stable and continued volatility is surely in the offing. So, for investors looking to generate a steady stream of income from their investment portfolios, stocks that are a part of the prestigious dividend aristocrats group could be the best bets now.

While the dividend aristocrats may not deliver high dividend yields, these companies enjoy steady profits and have consistently increased their dividends for at least the past 25 years. Because several companies cut or suspended their dividends last year, the interest in the dividend aristocrats has been growing given their long-term consistency. Investors’ interest in these companies is evident in the ProShares S&P 500 Dividend Aristocrats ETF’s (NOBL) 14.3% gains over the past three months compared to SPDR S&P 500 Trust ETF’s (SPY) 10.2% returns.

Johnson & Johnson (JNJ), Target corporation (TGT), Becton Dickinson and Company (BDX), and Emerson Electric Co. (EMR) are four dividend aristocrats that have increased their dividends for at least the past 40 years. So, we think investors seeking to receive a steady stream of income and protect their portfolio from market volatility should consider buying these shares.

Johnson & Johnson (JNJ)

Operating for more than a century, JNJ is one of the top players in the healthcare field. The company operates through three segments: Consumer, Pharmaceutical and Medical Devices. Its research facilities are in the United States, Germany, India, and the United Kingdom, among other locations.

The company has declared a $1.06 quarterly dividend per share, payable on June 8, 2021. This equates to $4.24 per share on a full-year basis. JNJ increased its dividend for the 59th consecutive year. It is not just a dividend aristocrat, but rather a dividend king. Over the past five years, JNJ’s dividend pay-outs have grown at a 6% CAGR. While its four-year average dividend yield is 2.6%, its current dividend translates to a 2.5% yield.

JNJ’s revenue for the first quarter, ended March 31, 2021 increased 7.9% year-over-year to $22.32 billion. The company’s net income came in at $6.20 billion, up 6.9% from the prior-year quarter. Also, its EPS increased 6.9% from the same period last year to $2.32.

For the current quarter, ending June 30, 2021, analysts expect JNJ’s EPS to increase 35.3% from the prior-year quarter to $2.26. Its revenue is expected to increase 26% year-over-year to $22.19 billion in the current quarter. It surpassed Street’s EPS estimates in each  of the trailing four quarters.

The Janssen Pharmaceutical Companies of JNJ announced favorable updated results from its Phase 3 ANDROMEDA study on May 26. The study evaluated DARZALEX FASPRO for the treatment of patients with amyloidosis. Janssen Research & Development, LLC.’s Vice President, Clinical Development, Jessica Vermeulen, said, “Following the FDA approval earlier this year, these latest data are a result of our commitment to further exploring the potential of DARZALEX in hematologic and rare diseases for patients in need of new options.” The stock has rallied 16.5% over the past year to close yesterday’s trading session at $168.81.

It’s no surprise that JNJ has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

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

JNJ is ranked #1 of 229 stocks in the Medical-Pharmaceuticals industry.

Click here to checkout our Healthcare Sector Report for 2021

Target corporation (TGT)

General merchandise retailer TGT sells a broad range of products, including household goods, food and pet supplies, apparel and accessories, and electronics through its stores and digital channels. It operates through its brands, such as Archer Farms, Market Pantry, Sutton & Dodge, and Art Class.

TGT has increased its dividends consistently for 53 years. Its dividend pay-outs have grown at a 4% CAGR over the last five years and 3.1% over the last three years. While its four-year average dividend yield is 2.9%, its current dividend translates to a 1.2% yield. It has declared a $0.68 quarterly dividend, payable on June 10.

The company’s revenue increased 23.3% year-over-year to $23.90 billion for its fiscal first quarter, ended May 1. TGT’s net income was $2.10 billion, which represents a 639.8% year-over-year increase. Its non-GAAP EPS increased 525% from the prior-year quarter to $3.69.

Analysts expect TGT’s EPS and revenue to increase 29.5% and 8.8%, respectively, year-over-year to $12.2 and $101.77 billion in its fiscal year 2022. It surpassed consensus EPS estimates in each of the trailing four quarters.

On April 27, TGT announced its collaboration with Hilton Carter, featuring modern and approachable styles of live and faux plants and accessories. This is expected to help the company expand its consumer base by leveraging its unique designs and products. The stock has gained 93.7% over the past year to close yesterday’s trading session at $227.37.

TGT’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock has an A grade for Sentiment, and a B grade for Quality and Value. Click here to see the additional ratings for TGT (Stability, Momentum and Growth).

TGT is ranked #2 of 39 stocks in the A-rated Grocery/Big Box Retailers industry.

Click here to checkout our Retail Industry Report for 2021

Becton Dickinson and Company (BDX)

Medical technology company BDX develops, manufactures and sells medical supplies, devices, laboratory equipment, and diagnostic products. It operates through two segments: BD Medical and BD Life Sciences.

The company has declared a quarterly dividend of $0.83 per share payable on June 30, 2021. The dividend equates to $3.32 per share on a full-year basis. BDX’s dividend pay-outs have grown at a 5.2% CAGR over the last five years and 3.1% over the last three years. While its four-year average dividend yield is 1.3%, its current dividend translates to a 1.4% yield. It has increased its dividend for 48 consecutive years.

BDX’s gross profit for its fiscal first quarter, ended March 31, 2021 increased 13.6% year-over-year to $2.64 billion. Its operating income for the quarter came in at $1.20 billion, up 14.3% year-over-year. The company’s net income was $936 million, which represents a 33.4% increase from the prior-year quarter. Its EPS has increased 25.1% from the same period last year to $3.19.

The company’s EPS and revenue are expected to increase 25.8% and 13.6%, respectively, year-over-year to $12.83 and $19.44 billion in its fiscal year 2021. It surpassed consensus EPS estimates in each of the trailing four quarters.

On May 25, BDX announced the U.S. launch of a Urine Culture Application for use with the BD Kiestra lab automation incubation and imaging system that can transform the way microbiology labs approach urine culture analysis. The stock has rallied 5.2% over the past six months to close yesterday’s trading session at $240.94.

BDX’s POWR Ratings reflects this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Growth, and a B grade for Stability and Value. Click here to see the additional ratings for BDX (Quality, Momentum and Sentiment).

BDX is ranked #48 out of 181 stocks in the Medical-Devices & Equipment industry.

Click here to checkout our Healthcare Sector Report for 2021

Emerson Electric Co. (EMR)

EMR is an established technology, software and engineering company that provides various solutions in the industrial, commercial, and residential markets. The company’s segments include its Automation Solutions, and Commercial & Residential Solutions businesses.

The company has consistently increased its dividends for the past 63 years. EMR declared a $0.51 quarterly dividend per share, payable on June 10, which equates to $2.02 per share on a full-year basis. Its dividend pay-outs have grown at a 1.2% CAGR over the last five years. While its four-year average dividend yield is 2.9%, its current dividend translates to a 2.1% yield.

EMR’s revenue has increased 6.5% year-over-year to $4.43 billion for its fiscal second quarter, ended March 31. The company’s net income came in at $561 million, which represents an 8.5% year-over-year increase. Its adjusted EPS increased 9% from the prior-year quarter to $0.97.

For the current quarter, ending June 30, analysts expect EMR’s EPS to increase 21.2% from the prior-year quarter to $0.97. Its revenue is expected to increase 9.3% year-over-year to $4.98 billion for the quarter ending September 30. EMR surpassed the Street’s EPS estimates in each of the trailing four quarters.

The company’s OSI digital grid solutions were selected by the Salt River Project (SRP) this month. SRP is the largest electricity provider in the greater Phoenix area to reliably manage its distribution power grid, optimize operations and incorporate a growing supply of distributed energy resources. With the growing demand for renewable energy resources, EMR is expected to gain further in the near-term. The stock has rallied 54.2% over the past year to close yesterday’s trading session at $95.45.

EMR’s POWR Ratings reflects this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. It has a B grade for Quality, Sentiment and Stability. Click here to see the additional ratings for EMR (Growth, Momentum and Value).

EMR is ranked #19 of 88 stocks in the B-rated Industrial-Equipment industry.

Click here to check out our Industrial Sector Report for 2021


JNJ shares were trading at $170.70 per share on Friday morning, up $1.89 (+1.12%). Year-to-date, JNJ has gained 9.82%, versus a 12.86% rise in the benchmark S&P 500 index during the same period.


About the Author: Ananyo Guha Niyogi


Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...


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