uploads///capital allocation

Johnson & Johnson’s Latest Dividend Payment: Is It Important?


Dec. 4 2020, Updated 10:53 a.m. ET

Quarterly cash dividend

Johnson & Johnson (JNJ) announced a quarterly cash dividend of $0.80 per share on July 18, 2016, payable on September 6, 2016. This is the same as the previous quarter’s dividend payment. It compares to a quarterly dividend of $0.75 per share in the last quarter of the previous fiscal year.

This change represents an increase of around 6.7% over the previous year’s quarterly dividend payment. Johnson & Johnson’s annual dividend amounts to $3.20 per share for fiscal 2016.

Article continues below advertisement

Johnson & Johnson’s dividend payout strategy

According to Johnson & Johnson’s capital allocation strategy, dividend payout has consistently been a priority for the company for several years. It has regularly returned value to its shareholders through increasing dividends. It’s an S&P dividend aristocrat, a stock that’s a constituent of the S&P 500 and has paid increasing dividends consistently for at least 25 years.

Some of the other S&P 500 dividend aristocrats in the medical device industry include Medtronic (MDT), Becton Dickinson (BDX), and Abbott Laboratories (ABT). You can gain exposure to these stocks by investing in the Vanguard Dividend Appreciation ETF (VIG).

Johnson & Johnson has reached a dividend payout ratio of approximately 56%. Its dividend yield is about 2.6%, which is estimated to be above the market average. The company has paid increasing dividends to shareholders consecutively for the last 54 years, and its five-year net dividend growth rate is about 6.9%.

After JNJ’s dividend payments to its shareholders, it still holds enough cash flow to invest in strategic mergers and acquisitions as well as share buybacks. So the company is positioned strongly to continue to improve its dividend payments and increase shareholder value.

Next, we’ll take a look at JNJ’s valuation compared to its peers.


More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.