For the thrill-seekers who get a kick out of watching industries move faster than a cat on a hot tin roof, riding the wave of trending growth stocks might be for you.
But for those who prefer a good night's sleep over night sweats about market swings, pinning down stocks that promise a smooth sail towards retirement is the name of the game.
Now, if I were to put my money on one sector that's as steady as they come, I'd bet the farm on healthcare.
Why, you ask? Well, let’s take a look at the numbers.
U.S. healthcare spending ballooned to a jaw-dropping $4.5 trillion in 2022. That’s $13,493 for every man, woman, and child. With an army of about 10,000 baby boomers daily marching into Medicare eligibility, it's a safe bet this number's on a one-way trip up.
Let’s talk about a healthcare giant arena that might not make you rich overnight, but it's a dividend machine you can count on: Johnson & Johnson (JNJ).
Think of J&J as the responsible older sibling of your portfolio. They recently raised their dividend for the 61st year in a row. That's a 3.1% yield right now – a pretty good return for such a dependable company.
Over the past five years, J&J’s payout has beefed up by over 25%. Quite the feat, especially considering it just slimmed down by spinning off its consumer health division.
This strategic move has made J&J a lean, mean, dividend-paying machine. They're now laser-focused on their core businesses: med tech and pharmaceuticals.
This focus is paying off – they raked in a sweet 11.1% jump in adjusted earnings in 2023. With dividends sitting pretty at $4.76 a share and a clear path for growth, this blue chip just keeps getting better.
But J&J's not just a big fish in the healthcare pond – it's practically the whole ocean. They hauled in a jaw-dropping $85.2 billion in revenue last year. This company has a decades-long track record of turning its massive size into consistent growth for shareholders.
Case in point: J&J just made a big power play, grabbing Shockwave Medical (SWAV) for a cool $13.1 billion.
Not bad for a company that clearly loves shopping for heart-focused companies – remember when they scooped up heart device maker Abiomed for $16.6 billion in 2022? This latest acquisition isn't just about beefing up their medical device game. It's their ticket to dominating the cardiovascular space.
But, J&J's not content with just hearts; they're setting their sights on robot-assisted surgery with their new Ottava device.
Sure, they might be playing catch-up to Intuitive Surgical (ISRG), but think about it: barely any surgeries use robots right now. This market has potential written all over it
Of course, it's not all sunshine and roses in the land of Big Pharma. J&J's had its share of courtroom battles and regulatory headaches, just like any mega-corporation.
But they've weathered the storm, and their credit rating is better than Uncle Sam's. That shows a kind of resilience you just can't fake.
In today's volatile market, it's easy to get swept up in the hype of flashy, high-risk stocks – the hares of the investing world. But what if true wealth lies in the slow and steady pace of the tortoise?
In the pharma world, J&J is proof that slow and steady progress, unwavering reliability, and a continuous effort to innovate are the secrets to long-term success. They might not be the flashiest stock, but their steady march of growth and consistent dividends make them a quiet force in the pharma world.
So the next time you're tempted to chase the latest market fad, remember the pharma tortoise – and consider adding a reliable blue-chip like J&J to your portfolio. If you see a dip, don't hesitate, buy it.
