I Bought More Shares Of This Healthcare Giant:

johnson-johnson_200x200The overall market continues to keep us guessing with wild price swings this month.  But what’s new?  We can never predict where prices are going in the short term.  However, history tells us that in the much longer term, prices will eventually move along with earnings.  So as an investor, it’s wonderful that the stock market is full of individual companies with their own unique profitability, fundamentals, and valuations to choose from.  My mission is to invest in businesses that have a history of earnings growth, annual dividend increases, and are trading at attractive valuations.  One day I’ll pay all of my expenses with the income these growing dividends generate.

Today I couldn’t resist averaging down on my position in healthcare giant Johnson & Johnson (JNJ).  I initiated a position in this company just a few months ago in July at $101.59 a share.  This afternoon, I purchased 16 shares for $96.90 and a $6.95 commission for a total cost of $1557.35.  I got in at a lower price by 4.62%.  Typically I’d like to see a position decline further before adding, but with JNJ I’ll sleep better at night with each extra share I accumulate.  My per share cost basis of $101.99 decreases to $99.81, and I got in with a trailing P/E just shy of 18 and a forward P/E just over 15.  This purchase also adds $44.80 to my forward dividends for a new 12-month total of $1,164.96.

Johnson & Johnson has had 51 years of consecutive dividend increases and is still easily growing them today at about 7% a year on average these past 5 years.  Why the price volatility?  It’s hard to say.  The company posted its earnings report today and topped expectations, even increasing full year guidance for the third time this year.  This quarter last year, JNJ reported earnings of $1.04 a share compared to $1.66 reported today.  The better than expected earnings were boosted by pharmaceutical sales of a new Hepatitis C drug, but this boost isn’t expected to last as competition has seemingly developed a better solution.  In my opinion, this sort of current news has little to do with the long term story, and I want more shares.  Keep falling JNJ, and I’ll keep buying.

Here are some recent fast graphs using my current JNJ position value of $3,310.09 without dividend reinvestment:

2014_oct_recentbuy_JNJ_FG1

2014_oct_recentbuy_JNJ_FG2

2014_oct_recentbuy_JNJ_FG3

2014_oct_recentbuy_JNJ_FG4

 

 

What do you think about JNJ?  Could you ever own enough?

 

 

My Dividend Growth

http://www.mydividendgrowth.com

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39 thoughts on “I Bought More Shares Of This Healthcare Giant:
    1. My Dividend Growth

      Steve,

      Thanks for the support! I’m happy to see you’ve set up a blog over there, congrats on starting your journey! I’m wishing you the best success in life and in your investments, keep at it 🙂

      Cheers,
      Ryan

       
      Reply
    1. My Dividend Growth

      W2R,

      I appreciate it. I would love to see JNJ get closer to it’s 5 year average yield of 3.2% and who knows what will happen with this crazy market. I didn’t see it, but it looks like JNJ creeped into the lower 95’s again today. I hope prices stay low when it’s time to buy again!

      Best Wishes,
      Ryan

       
      Reply
  1. retirebeforedad

    MDG,
    I was surprised to see JNJ dip below $96 yesterday. I wasn’t quick enough, I’d like to add it too. Though now it looks like we could be down more today. Hard to decide what to buy!
    -RBD

     
    Reply
    1. My Dividend Growth

      RBD,

      I did a double take too these last two mornings. Both mornings started with massive selling and I missed both of them. It’s wild that this stock price was almost $109 a share less than a month ago, that’s a steep drop. This has been a fun correction so far though, and I’m going to put some super low limit orders on a few companies in the off chance they go through. Otherwise I’ll be making a purchase in about a week and a half. Please stay down, Mr. Market!

      Best Regards,
      Ryan

       
      Reply
  2. roadmap2retire

    Good pick, Ryan.
    I am hoping to pick some up after it crosses into the 3%+ territory…so, somewhere below $93.

    Best wishes
    R2R

     
    Reply
  3. Tom

    Great pick
    Will hopefully add to JNJ next week when funds become available
    Also watching closely $BAX and thinking of averaging down on $AFL
    Great blog really enjoy reading it

    Cheers

    Tom

     
    Reply
    1. My Dividend Growth

      Tom,

      Thanks for the great comment and I’m glad to hear from you. I love that the market has JNJ’s price all over the place this last month. I wonder if it’ll drop under $90, where it was earlier in the year. Hopefully we’re both able to add some next week at even better prices. Those other names you mentioned are also stellar picks here. I like BAX’s coming spin off, and it’s forward P/E is super attractive. But AFL, is clear the winner in the valuation department and you gotta love over 30 years of dividend raises. I don’t think you can go wrong with any of these choices, I hope you’ll stop back and let me know what you went with!

      Take care,
      Ryan

       
      Reply
  4. Dividend Road

    I’m looking to pick up some JNJ today since the market is way down. I have a small position but looking to make JNJ a major dividend player in my portfolio. Thanks for the great analysis!

     
    Reply
    1. My Dividend Growth

      DGJ,

      Thank you! There’s been so much volatility in JNJ these last 20 days, which is funny because this is suppose to be a stable / defensive type stock like PG, which has shrugged off all the current noise like a champ. Goes to show that nothing can be predicted. I’ll be eager to see when and if you hop aboard JNJ.

      Wishing you the best,
      Ryan

       
      Reply
    1. My Dividend Growth

      Dave,

      Thank you much, I couldn’t agree more and am very happy to gain a larger piece of this great company. This is going to be a larger holding for me in the future like it should for any dividend growth investor. It’s good to hear from you again!

      Take care,
      Ryan

       
      Reply
  5. My Dividend Pipeline

    Ryan,

    You are becoming quite the fisherman grabbing JNJ at a fantastic price. I don’t own any shares yet, but I am certainly going to in the near future. Keep up the great work and take advantage of this choppy market. Bargains are everywhere!

    MDP

     
    Reply
    1. My Dividend Growth

      MDP,

      I like your analogy, now I just have to keep reeling in those dividends, hehe. Your watchlist for next week looks great, you might have some tough decisions to make. Let’s hope JNJ inches down a bit more because it’d be nice to have you as a fellow shareholder. Best part about JNJ is that the company isn’t going anywhere anytime soon, bring on those bargains!

      Best,
      Ryan

       
      Reply
    1. My Dividend Growth

      Captain,

      I’m in good company with DividendDeveloper, it’s good to see he was on top of it and got in even lower than I did. I’m glad you’re signing off on the price too, because you have an amazing cost basis with this company. Your gains are outstanding. I’m so glad to finally get this position rolling and seeing your history with it is very inspiring 🙂

      Best Wishes,
      Ryan

       
      Reply
  6. Dividend Mantra

    Ryan,

    Great company at a solid price. Can’t really go wrong there. Really solid purchase here!

    JNJ is my largest position by dollar weight, so I’m hesitant to add here. But I may add another 10-15 shares if the price continues this downward path. The company is as great as it’s ever been and the yield is near 3% now.

    Keep up the great work. Nothing like putting some capital to work when the market turns volatile!

    Best regards.

     
    Reply
    1. My Dividend Growth

      Jason,

      Thank you much! I would be so happy to have JNJ be my first holding to reach 10K like you 🙂 You’ve already done the grunt work in building the position at a great cost, so I understand the hesitation in adding more at your current weight. I face so many of these battles with my young portfolio and deciding where to throw new capital. But it’s been a fun market to witness these last few weeks and I use to think this sort of thing was scary. I guess that means I’m growing and gaining experience as an investor, which is great! It’s always awesome to hear from you!

      Best Wishes,
      Ryan

       
      Reply
  7. Special Agent Dividend

    Great buy to significantly cut your cost basis. I’m hoping for some lower prices for the rest of the year so we can keep adding quality companies on the cheap! I’m hoping to add JNJ in the near term; now I just have to save up the funds…

     
    Reply
    1. My Dividend Growth

      SAD,

      Thank you very much. I’m definitely welcoming this correction and all the bargains with you. The more recent 10% corrections all came and went quickly, so hopefully this one lingers and we all get a chance to back up the truck. Keep up that saving and I hope you get into JNJ lower than I did 🙂

      Take care,
      Ryan

       
      Reply
  8. TwoInvesting

    Ryan,

    Good pick in JNJ. With the recent drop, I just added some too. However, due to their great stock performance over the last year or so, I actually slightly increased my cost basis. Still an excellent point that I wasn’t expecting to get again!

     
    Reply
    1. My Dividend Growth

      Scott,

      Thank you! I highly respect and admire your investments so I’m happy to hear we were on the same page about this one. I still can’t believe JNJ has fallen this much in less than 30 days. I loved all your latest picks, I grabbed Visa a few weeks ago too and hope that stays low so I can average down around @200. Also UL recently went through in my Loyal3 account. Half of your picks! Wishing you the best as you take advantage of the falling prices 🙂

      Best,
      Ryan

       
      Reply
  9. No Debt

    Great buy of a great company. Their decentralized approach is a great approach that other companies should follow.

     
    Reply
  10. JC @ Passive-Income-Pursuit

    I really want to increase my stake in JNJ and will hopefully do so tomorrow or next week. I’ve been patiently waiting for an opportunity to add to JNJ at sub $100 levels. I’m hoping for a bit lower prices because I expect volatility to still persist but I want to act pretty quick because you just never know what Mr. Market will do.

    Nice buy!

     
    Reply
    1. My Dividend Growth

      JC,

      I hope you’re able pounce on JNJ much lower. I’m going to set a low limit order in case there’s a random drop below $90, wouldn’t that be nice? Let’s hope the market cooperates and keeps all these options available a while longer. I’m seeing so many names on my watchlist light up lately. I think your patience will pay off handsomely and good luck shopping!

      Best,
      Ryan

       
      Reply
  11. DivHut

    Makes sense to me. When Mr. Market decides to put some great dividend paying stocks on sale, why not take advantage. Seeing JNJ drop from about $108 to about $96 in the span of a couple weeks would surely get any dividend investor excited. Thanks for sharing.

     
    Reply
    1. My Dividend Growth

      DivHut,

      Great way to put it. Very exciting price indeed and I want to accumulate as many shares as possible in this great company this early on. I’m so curious to what the market will present this coming week. I’m hoping more selling! Lower prices means easier decisions putting the new capital to work 🙂 Keep up the great work over there!

      Best,
      Ryan

       
      Reply
  12. Dividend Growth Journey

    Hi Ryan,
    I initiated position in JNJ last week through my weekly sharebuilder purchases. But the price jumped by about 5% already and hence couldn’t add to it more this week. Will continue to monitor this to add more as price declines. Let’s see how it goes.

     
    Reply
    1. My Dividend Growth

      DGJ,

      Excellent work! JNJ is such a fantastic company. I’m very surprised and a little sad that the market recovered so quickly, especially with JNJ. This is one investment we’re both going to be super happy about several years down the line. Thanks for the update and I hope you have a great weekend 🙂

      Best,
      Ryan

       
      Reply
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