Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Johnson & Johnson (JNJ): Will Dividend Growth for This Dividend King Start Slowing?

These competitors all have past dividend growth rates greater than 9%, dividend yield’s above 2.0%, lower payout ratios, and higher estimated earnings growth. Of these competitors I’d start looking into Cardinal Health, Inc. (NYSE:CAH) first as its managed 17 years of consecutive dividend increases while keeping its payout ratio low and dividend growth rates high. It’s also expected to grow the most over the next 5 years.

is an interesting candidate, but because of its short dividend streak of 6 years compared to Johnson & Johnson (NYSE:JNJ)’s 50 years it is a bit like comparing apples to oranges from a dividend perspective. I’d feel much more comfortable with the safety of Johnson & Johnson’s dividend. It takes a special company to increase their dividend for half a century.

is a well known large international pharmaceutical company. I wouldn’t say it has the international presence of Johnson & Johnson, but it is up there. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) Industries has a more respectable dividend streak of 13 years, but it’s still a few years short of Cardinal Health and well short of Johnson & Johnson’s 50 years. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is based in Israel, and listed on the NYSE as an ADR so the dividend payments can fluctuate with changing currencies.

Conclusion

Johnson & Johnson (NYSE:JNJ) has been considered a dividend growth star for a number of years now. Their dividend streak of 50 consecutive years with dividend increases is very impressive as only a handful of companies have been able to reach this milestone. While you would have had good dividend growth in the past I think these rates will drop. The company’s payout ratio has been increasing over the years and I don’t think they’ll want it to go much higher. If the 5 year estimated EPS growth rate of 6.4% is roughly accurate then I expect the dividend growth will range from 4% to 6% per year going forward.

To see the full dividend stock analysis for Johnson & Johnson and my target buy price click here.

The article Will Dividend Growth for This Dividend King Start Slowing? originally appeared on Fool.com and is written by Michael Weber.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.