5 Ultra-Safe Dividend Aristocrats to Buy in a Market Downturn

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

JNJ – Worries over intensifying supply disruptions with growing sanctions on Russia have shaken investors. Furthermore, rising crude oil prices coupled with record-high inflation have given rise to recession fears. Thus, we think it could be wise to bet on ultra-safe dividend aristocrats Johnson & Johnson (JNJ), Walmart (WMT), PepsiCo (PEP), Abbott (ABT), and Emerson Electric (EMR) to ensure a steady income stream amid current market volatility. Read on.

The major market indexes have been under pressure of late due to investors’ concerns over surging inflation, increasing sanctions on Russia, rising energy prices, supply disruptions, and prospective aggressive interest rate increases by the Federal Reserve this year to tame inflation. Market volatility is expected to linger in the absence of signs that persistent issues are easing. Crude oil prices have remained consistently above $100 per barrel, and further supply disruptions may propel them to newer highs. Recessionary conditions have historically followed higher crude oil prices. Earlier this week, natural gas prices climbed to 13-year highs.

The March CPI data revealed an 8.5% increase year-over-year, representing the highest inflation since December 1981. In addition, the March jobs data suggested a tight labor market. According to Goldman Sachs, the odds of economic contraction stand at 35% over the next two years.

Thus, we think investors looking to weather the market uncertainty could look to add fundamentally strong dividend aristocrats Johnson & Johnson (JNJ), Walmart Inc. (WMT), PepsiCo, Inc. (PEP), Abbott Laboratories (ABT), and Emerson Electric Co. (EMR). In addition to generating stable income, these names hold capital appreciation potential. In addition, these businesses are ultra-safe because of their pricing power.

Johnson & Johnson (JNJ)

JNJ in New Brunswick, N.J., researches, develops, manufactures, and sells a range of products in the healthcare field. It operates through the Consumer, Pharmaceutical, and Medical Devices segments.

On Feb. 1, 2022, JNJ’s Janssen Pharmaceutical Companies announced that the U.S. FDA had approved an expanded label for CABENUVA to be administered every two months to treat HIV-1 in virologically suppressed adults. Candice Long, President, Infectious Diseases & Vaccines, Janssen Therapeutics, said, “With this milestone, adults living with HIV have a treatment option that further reduces the frequency of medication.”

Over the last three years, JNJ’s dividend payout has grown at a 5.6% CAGR. Its four-year average dividend yield is 2.62%, and its current dividend translates to a 2.47% yield.

JNJ’s reported sales increased 4.9% year-over-year to $23.42 billion for the first quarter, ended March 31, 2022. The company’s adjusted net earnings rose 2.9% year-over-year to $7.12 billion. Also, its adjusted EPS came in at $2.67, representing a 3% increase year-over-year.

Analysts expect JNJ’s EPS and revenue for its fiscal 2022 to increase 7.2% and 5.4%, respectively, year-over-year to $10.51 and $98.80 billion. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 12.5% in price to close the last trading session at $183.08.

JNJ’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall rating of A, translating to a Strong Buy. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

It has an A grade for Stability and a B grade for Sentiment and Quality. In the Medical – Pharmaceuticals industry, it is ranked #2 out of 170 stocks. Click here to see the other ratings of JNJ for Growth, Value, and Momentum.

Click here to checkout our Healthcare Sector Report for 2022

Walmart Inc. (WMT)

Famous retailer WMT in Bentonville, Ark., operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, and e-commerce websites, including walmart.com and Walmart.com.mx flipkart.com, and others. The company operates through the Walmart U.S., Walmart International, and Sam’s Club segments.

On Jan. 25, 2022, WMT announced that it had signed an agreement to invest in indoor vertical farming company Plenty. The equity investment is part of a broader strategic partnership to utilize Plenty’s indoor vertical farming technology platform to deliver fresh produce to WMT’s retail stores. Chief Merchandising Officer of Walmart U.S. said, “This partnership not only accelerates agricultural innovation but reinforces our commitment to sustainability by delivering a new category of fresh that is good for people and the planet.”

Over the last three years, WMT’s dividend payout has grown at a 1.9% CAGR. Its four-year average dividend yield is 1.81%, and its current dividend translates to a 1.42% yield.

For its fiscal year ended Jan. 31, 2022, WMT’s total revenue increased 2.4% year-over-year to $572.75 billion. The company’s adjusted operating income increased 12.3% year-over-year to $26.05 billion. Also, its adjusted EPS came in at $6.46, representing a 17.8% increase  year-over-year.

For its fiscal year 2024, WMT’s EPS and revenue are expected to increase 7.7% and 3.5%, respectively, year-over-year to $7.28 and $611.13 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 12.8% in price to close the last trading session at $157.65.

WMT’s POWR Ratings reflect solid prospects. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.

It has a B grade for Growth, Stability, Sentiment, and Quality. It is ranked #6  of 39 stocks in the A-rated Grocery/Big Box Retailers. To see the other ratings of WMT for Value and Momentum, click here.

PepsiCo, Inc. (PEP)

PEP is a global food and beverage company. It operates in the Frito-Lay North America, Quaker Foods North America, PepsiCo Beverages North America, Europe, and AMESA segments. PEP is headquartered in Harrison, N.Y. 

On March 23, 2022, PEP and Beyond Meat, Inc. (BYND) announced that under their  PLANeT partnership joint venture, they would launch meatless jerky as their first product. The partnership will help PEP work towards its sustainability and health goals in addition to deepening its presence in plant-based categories.

Over the last three years, PEP’s dividend payout has grown at a 5% CAGR, while its four-year average dividend yield is 2.87%, and its current dividend yield translates to a 2.49% yield.

PEP’s net revenue for its fiscal year ended Dec. 25, 2021, increased 12.9% year-over-year to $79.47 billion. The company’s net income  increased 6.9% year-over-year to $7.61 billion. Also, its EPS came in at $5.49, representing a 7.2%  increase  year-over-year.

Analysts expect PEP’s EPS for its fiscal year 2023 to increase 8.6% year-over-year to $7.22. Its revenue for the quarter ending March 31, 2022, increased 6.8% year-over-year to $15.53 billion. It surpassed the Street’s EPS estimates in each of the trailing four quarters. And over the past year, the stock has gained 19.4% in price to close the last trading session at $172.90.

PEP’s POWR Ratings reflect solid prospects. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

It has a B grade for Stability and Quality. It is ranked #13 out of 34 stocks in the B-rated Beverages industry. Click here to see the other ratings of PEP for Growth, Value, Momentum, and Sentiment.

Abbott Laboratories (ABT)

ABT is engaged in discovering, developing, manufacturing, and selling a diversified line of healthcare products. The Abbott Park, Ill.-based company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices.

On April 4, 2022, the U.S. FDA approved ABT’s Aveir single-chamber (VR) leadless pacemaker for treating patients in the U.S. with slow heart rhythms. Unlike traditional pacemakers, the Aveir leadless pacemaker has a unique mapping capability to assess correct positioning and is implanted directly inside the heart’s right ventricle via a minimally invasive procedure. This marks a significant advancement in patient care and brings new, never-before-seen features to patients and physicians.

Over the last three years, ABT’s dividend payout has grown at a 15.3% CAGR. Its four-year average dividend yield is 1.49%, and its current dividend translates to a 1.57% yield.

For its fiscal year ended Dec. 31, 2021, ABT’s net sales increased 24.5% year-over-year to $43.07 billion. The company’s net earnings increased 57.3% year-over-year to $7.07 billion. Also, its EPS came in at $3.94, representing a 57.6% increase  year-over-year.

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

It has a B grade for Growth, Stability, Sentiment, and Quality. Within the Medical – Devices & Equipment industry, it is ranked #4  of 159 stocks. Click here to see the additional ratings of ABT for Value and Momentum.

Click here to checkout our Healthcare Sector Report for 2022

Emerson Electric Co. (EMR)

EMR is a global technology, software, and engineering company that provides various solutions for customers in industrial, commercial, and residential markets. The Ferguson, Mo., company’s segments include Automation Solutions, and Climate Technologies and Tools & Home Products, which comprise its Commercial and Residential Solutions business.

On Jan. 27, 2022, EMR announced the launch of premium monitoring services for its Oversight cargo services platform, which will transform billions of aggregated sensor data points from GO loggers and trackers into insights customers can utilize to manage their cold chain effectively.

Over the last three years, EMR’s dividend payout has grown at a 1.5% CAGR. Its four-year average dividend yield is 2.71%, and its current dividend translates to a 2.15% yield.

EMR’s net sales increased 7.4% year-over-year to $4.47 billion for its first fiscal quarter, ended Dec. 31, 2021. The company’s adjusted EBITA increased 15.9% year-over-year to $878 million. Also, its adjusted EPS came in at $1.05, representing a 12.9%  increase  year-over-year.

Analysts expect EMR’s EPS and revenue for its fiscal 2022 to increase 22.2% and 7.4%, respectively, year-over-year to $5.01 and $19.58 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 4.2% in price to close the last trading session at $95.69.

EMR’s POWR Ratings reflect solid prospects. The stock has an overall B rating, equating to a Buy in our proprietary rating system.

It has a B grade for Stability, Sentiment, and Quality. It is ranked #16 out of 93 stocks in the Industrial – Equipment industry. To see the additional ratings of EMR for Growth, Value, and Momentum, click here.

Click here to check out our Industrial Sector Report for 2022


JNJ shares rose $0.47 (+0.26%) in premarket trading Wednesday. Year-to-date, JNJ has gained 8.14%, versus a -5.63% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


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