All About Interest

One man's journey to financial independence.

Recent Purchase

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If I had to pick one company from the S&P 500 that I felt would still be around in another 100 years, JNJ would be at the top of a short list.

Johnson & Johnson is a healthcare behemoth with a current market cap of 328 billion.  They are one of only 2 publicly traded companies with a AAA debt rating from S&P, the other being Microsoft.  They are a dividend champion and have raised dividends for over 56 straight years.  They also have great tailwinds from the baby boomers.  It doesn’t get much better than this folks.

JNJ is a wonderful company trading at a fair value.

According to E*Trade, JNJ has expected 2019 earnings of 8.58 giving them a forward P/E of around 14.  Their 5-year average P/E is 20.2.

Morningstar agrees and assigns them a 4 Star rating with a fair value of $130/share.

I first purchased shares back in 2011 for $64/share.  The share price has nearly doubled and so has the dividend.

Speaking of double, I decided to double my position over the last couple of weeks.

My recent purchases:

06/01 – Bought 24 of shares of JNJ at 120.86
06/05 – Bought 25 shares of JNJ at 121.51
06/15 – Bought 25 shares of JNJ at 122.50

I spent $9000 in new capital and added $266.40/year to my dividend income. This is an average yield of about 3%.

Forward 12-month Dividends:

My forward -12-month dividends are now up to $15,805.

Notes:

JNJ is 4.2% of my current portfolio.  I have no issue bringing them up to a 5% weighting which I will consider a full position for JNJ.  I currently own 154.46 shares.

I just couldn’t help myself.  With a rising rate environment I feel good holding great companies with high debt ratings.

In Recent News:

I’m currently working for my old employer from home as a recruiter.  It’s nice to be home and be able to spend extra time with the family.  So far this is working out well.  We’ve since moved into a new home last fall in a different town since we closed the restaurant and I finally feel like I’m getting caught up on things where I have a few minutes to write now.  I plan to at least start doing quarterly dividend reviews which I’ll put out in early July.  I also hope to post more often about recent trades.  I do always keep My Portfolio updated.

The restaurant has been leased to a new tenant and in fact all of my rentals are fully leased now.  I’m up to 4 rentals including the commercial property that has two tenants.

My passive income is finally back on track and moving up nicely.  I hit the $1,000/mo in dividends mark that I mentioned back in March.  I have made some nice progress over the last year.  One way I’ve been able to drive up my dividends is through options, you can see all of my recent options trades here.

I also recently signed up for a new brokerage account ,Robinhood.  If you haven’t check them out yet I’d recommend looking at my Robinhood Review.  You can still get a free share of stock as of this writing by just signing up.

So what have you been purchasing?  I hope everyone is well on their way to achieving their goals this year!

Comments

    • Hi Money Hungry,

      I did end up buying more than I originally though. It’s just hard to pass up a wonderful company trading at fair value.

      Cheers!

  2. Great buys, I like how you averaged in! JNJ is the best of the best and I wouldn’t mind increasing my stake either! Great buy and you went in with a nice sum of money, good for you! Enjoy all your shares!

    DI

    • DI,

      Thanks! JNJ is about as close to buy and forget about it as you can get. Steady, reliable increases every single year. I don’t mind a slightly higher than average weight in this wonderful company.

      Thanks for stopping by!

    • Lanny,

      Haha, it was a fairly large purchase for me in a short period of time. I only spaced the trades out a few weeks. I’m pretty comfortable with the size of my position now but if the prices hang around here long enough I could see bringing the company up to a 5% weight by the end of the year. JNJ should be on everyone’s all-time favorite list.

      Take care!

  4. Nice purchase. I was looking at adding to my stake as well but went with a new position because I’ve been eyeing it for a while. JNJ is definitely one of the few companies that I’d bet heavily on still being around 100 years from now so it’s nice to see you add to your stake at a fair valuation. I still have some cash ready for one more small-ish purchase and JNJ just might make me loosen up those purse strings with the yield hovering just below 3%.
    JC recently posted…Budget Check & Cash Flow Update – May 2018My Profile

    • JC,

      I saw you had purchased CBOE a while back, I’ll have to check that one out. Yes, I would definitely say JNJ will still be around in some form in 100 years barring a zombie apocalypse lol.

      JNJ is a company that usually has a premium attached to it for good reason. When I can pick it up for what I believe to be fair value, that’s a win. In 10 years a few dollars difference won’t matter anyways. My last purchase price before these recent ones has already doubled. I wouldn’t be surprised to see it double again in another 10 years.

      Cheers!

    • Hi Mike,

      I’d imagine JNJ is held in a lot of funds. That’s good you have some exposure to healthcare, I believe the sector will provide outsized returns for a while. It’s certainly a company I plan to have in my portfolio until I die and can hand it over to my kids.

      Take care!

    • Thanks Bert! It’s a big order to double a position but I’m confident I won’t regret adding to this healthcare juggernaut.

      Take care!

    • PCI,

      This was a rather large purchase for me. I plan to bring the weight up in healthcare stocks in general over the next year.

      I agree. You can’t really ever go wrong with JNJ. Thanks, working from home has its perks for sure. So far it’s working out well. I’m also fortunate to have all rentals leased out. My goal is to buy one more this year, we’ll see. Rates have sure been rising fast.

      Thanks for stopping by!

  8. JNJ is always a nice pick up for any DGI portfolio. 2018 hasn’t been the best year for the stock and I can understand you and others picking some up at these depressed levels. I still have not made my June purchase but I’m looking at the staples first. Thanks for sharing.
    DivHut recently posted…Dividend Income Update May 2018My Profile

    • DivHut,

      I figured there’s a lot worse places I could put that money. I’ll sleep well at night knowing I invested in more JNJ.

      I agree there’s some bargains in staples but consumer staples make up over 40% of my portfolio. I’ve been adding them also. I need to bring up the weight of some other sectors like healthcare. I’ll be curious what you end up buying.

      Cheers!

  9. Wow that is quite the position. I wish I could have 9k fresh capital to spend. Very great choice. Excellent history, decent yield, and one of the few AAA rated companies left. That also adds a lot of dividend income to your portfolio. Keep it up!

    • DD,

      Thanks! It was 3 decent size purchases over a couple of weeks that makes for one pretty large purchase. It was a lot of capital for me to put to work in one company. JNJ is a company I likely will never have to work about. They pay a decent yield with lots of expected dividend growth ahead. I can only hope the next 25 years are as good as the last.

      Cheers

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