Microsoft Corporation (MSFT), Johnson & Johnson (JNJ) Among The 3 Highest-Yielding Stocks In this Fund

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An income pick in health care industry

Johnson & Johnson (NYSE:JNJ), incorporated in 1887, is one of the largest healthcare companies with 275 operating subsidiaries in the world. The company has employed a decentralized management structure, focusing on three main business segments:Consumer, Pharmaceutical, and Medical Devices and Diagnostics. As of March 2013, Donald Yacktman owned 3.8 million shares in the company, accounting for 4.24% of the total portfolio.

Johnson & Johnson (NYSE:JNJ) is a good cash-generating machine. In the past ten years, the company has generated a growing free cash flow, from $8.3 billion in 2003 to nearly $12.5 billion in 2012. It has also increased its dividend consistently, from $0.93 per share to $2.4 per share during the same period.

Johnson & Johnson (NYSE:JNJ) is trading around $83 per share, with a total market cap of $231.3 billion. The company is valued as much as 10.8 times EV/EBITDA and 14.4 times its forward earnings. At its current trading price, Johnson & Johnson pays its shareholders a dividend yielding 2.9%.

My Foolish take

With leading global market positions in their respective industries, decent dividend yields, strong balance sheet, and strong cash generating abilities, SYSCO Corporation (NYSE:SYY), Microsoft, and Johnson & Johnson could fit well in the income portfolios of long-term investors.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson and Sysco. The Motley Fool owns shares of Johnson & Johnson and Microsoft.

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