There are different ways that investors put their portfolios together. Some might go for high-growth stocks, and some go for dividends. Successful portfolios usually have a good mix of both.
If you are looking to round out your portfolio with two options that can help build a stronger portfolio, Apple and Johnson & Johnson are among the buy-and-hold picks.
Whoever said money does not grow on trees never had a share of Apple stock. This corporation has been a great investment, especially after the first iPhone in 2007.
The company has been delivering dividends on its stock going back to 1987, with consistent yearly payouts since 2012. The current yearly dividend has a yield of 0.59%, although this rate lags below the S&P 500 average of around 1.3%. For this reason, it’s not likely that investors go to Apple for just its dividend.
Even still, it can make for a great portfolio addition for investors (maybe retirees) who are seeking quarterly income. And for people who choose to reinvest their dividends, that strategy might turn into an even better return due to results in buying more shares, which in turn can deliver better gains in future dividends as they compound each year. And more shares can then lead to better gains when you consider the possible growth on this historical growth.
Throw in some increasing speculation that Apple is in the middle of creating its own car to compete with Tesla and others in the EV market, and it makes for an intriguing time to buy the stock. Meanwhile, the whispered fourth-quarter earnings is $1.35 a share compared to the market expected number of $1.23, suggesting the potential for a 9.7% beat on earnings.
Johnson & Johnson
J&J’s stock price has had dramatic moves since its pandemic-induced decline in March of 2020 to $105 a share from a past high of $152. From this bottom, it went to a peak just under $180 before succumbing to a combination of larger market pressures and a sell-off in pharma stocks in Sept., resulting in the current price about $157.
But as the stock moves, the company continues to give dividends consistently, currently with a yield of 2.65%, based on a yearly payout of $4.24 per share. The firm now has 59 consecutive years of dividend increases, while giving at a rate nearly double that of the average S&P 500 dividend yield. Those 59 consecutive years of dividend growth put the company into an elite category of Dividend Kings — companies that have boosted their payouts every year for 50 consecutive years or more.
Author: Scott Dowdy