Recent Buy: July 2014
Today I initiated a small position in the very popular DGI company Johnson & Johnson; I now hold 14 positions in my portfolio. JNJ has been increasing dividends for 51 years and is still growing strong. The company recently announced a 6.1% dividend increase and has a 10 year dividend growth rate of 10.9%. I bought 18 shares at $101.59 and a $6.95 commision charge for a total of $1835.57. I paid a bit of a premium for an excellent company with a trailing PE of 20 and a forward PE of 17. The normal 5 year yield is 3.1%, and I’ll be starting my position with a yield of 2.8%. This adds $50.40 to my annual forward dividends for a new total of $862.91. By the end of the market day the stock went down even more, and the price was as low as $100.26 a share. I’d love to add more to this position when the valuation is better, but I’m not sure when we’ll see that. I’m adding here for the long term, and I won’t be worried about price as I watch my dividends grow larger each year.
My favorite recent article about JNJ helped me a ton in determining valuation, and it was penned by the talented JC @ Passive Income Pursuit and posted on Seeking Alpha. He concluded it might be best to wait for shares to fall under $100. Do yourself a favor and read it here!
Do you like JNJ? What price would you pay?