5 Best Dividend Paying Stocks to Buy Right Now

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 113

Johnson & Johnson (NYSE:JNJ) and its subsidiaries develop, manufacture, and sell a broad range of healthcare products, giving the company a presence across multiple areas of the healthcare industry. The company’s dividend remains one of its biggest attractions for income-focused investors.

One way to assess the strength of a dividend is to compare it with the cash a company generates. Last year, Johnson & Johnson produced $20.4 billion in free cash flow and paid out $12.4 billion in dividends. That translates to a payout ratio of about 61%, a level that suggests the dividend remains well supported by the business.

The healthcare giant also maintains a strong balance sheet. As of the end of the first quarter, J&J held $21.7 billion in cash and cash equivalents, providing ample financial flexibility and supporting its ability to continue returning capital to shareholders.

Over the past decade, the company has delivered an average dividend yield of 2.7%, comfortably above the broader market average.

Investors are also keeping an eye on the company’s legal challenges tied to talcum powder products it previously sold. Those issues have created uncertainty and remain a concern for some shareholders. At the same time, Johnson & Johnson (NYSE:JNJ) has continued to operate from a position of strength. Its ability to manage those legal headwinds while continuing to execute across its diversified healthcare businesses highlights the resilience of the company and the durability of its underlying operations.