This Super-Safe High-Yield Stock Just Extended Its Dividend Growth Streak to 63 Years in a Row

Core Viewpoint - Johnson & Johnson continues to enhance shareholder value through consistent dividend increases, maintaining a strong financial profile and significant investments in growth opportunities [1][9]. Financial Health - Johnson & Johnson has a AAA bond rating, one of only two companies globally with such a top credit rating, surpassing the U.S. government [3]. - The company ended Q1 with $13.5 billion in net debt, consisting of $38.8 billion in cash against $52.3 billion in debt, which is manageable given its $370 billion market cap [4]. - In the most recent quarter, Johnson & Johnson generated $3.4 billion in free cash flow, sufficient to cover its $3 billion dividend payout [4]. Dividend Performance - The recent 4.8% increase in dividend payments extends the company's dividend growth streak to 63 years, placing it among the elite Dividend Kings [1]. - The forward dividend yield now stands at 3.4%, significantly higher than the S&P 500's yield of 1.4%, making it an attractive option for passive income [2]. Cash Flow and Investments - Last year, the company produced $20 billion in free cash flow, a $1.6 billion increase from 2023, despite higher litigation costs and taxes [5]. - Johnson & Johnson invested $17 billion in R&D last year, representing 19.4% of its sales, and continued this trend with $3.2 billion in Q1 [6]. - The company has made substantial acquisitions, spending over $14 billion in Q1 to acquire Intra-Cellular Therapies, alongside previous acquisitions totaling over $15 billion [7]. Growth Outlook - Johnson & Johnson aims for a 5% to 7% compound annual growth rate in operational sales from 2025 to 2030, which is expected to drive earnings and free cash flow higher [8]. - The company's robust free cash flow and strong balance sheet support its ability to invest in R&D and acquisitions, positioning it for continued growth [9].