J&J Q1 - Increasing Their Dividend

Yesterday Johnson and Johnson released their Q1 numbers before the US market opened. The stock finished yesterday 4.5% higher. The first number that you need to know is that they increased their dividend by 6.5%. In the current environment where some companies are suspending their dividend, J&J is increasing theirs. This shows the strength of their balance sheet, and it is a very strong signal from management about their expectations for the future of the company.



One of the main reasons that you want to own J&J is for their dividend, which is underpinned by their diversified business. Since the Covid-19 breakout, their consumer business, selling things like Listerine and Neutrogena has seen a surge in sales, particularly through online retailers. Added to that, their drug division has also seen a surge in demand for drugs that treat flu-like symptoms. The division that has been struggling is medical devices, due to people not going through with elective surgeries. Two of their divisions are doing better than expected, which offsets the one division that is doing worse. That is the beauty of diversification.

J&J is one of the companies who is working on a vaccine for Covid-19. They hope to go to trial in September and then start production in 2021. Looking ahead, J&J reduced their revenue guidance by 7%. In the current global environment, that doesn't look too bad. The J&J share price is flat for 2020. It is during times like this that you are glad to own big companies, who control household brands, and who have strong balance sheets.