Dividend stocks provide a testament to their financial resilience and commitment to shareholders. With 3% or higher yields, these stocks offer income stability and growth potential, making them an attractive investment choice.
Thus, investors may consider watching dividend stocks, like Johnson & Johnson (JNJ), Northwest Natural Holding Company (NWN), and Universal Corporation (UVV), that have yields of 3% or higher.
With the Federal Reserve’s recent move, the cut in interest rates, historically, has proven to be a boon to dividend-paying stocks. Some analysts believe that the dividend-paying sectors may benefit from the supportive environment and gain momentum, showing significant returns in the market.
As interest rates fluctuate, unemployment also does. As of September 2024, the unemployment rate was 4.1%, a slight ease from the previous month’s rate. Against this backdrop, income-seeking investors often pivot toward dividend stocks as they offer consistent cash flow.
Given these favorable trends, let’s analyze the fundamental aspects of the three dividend stocks.
Johnson & Johnson (JNJ)
JNJ is engaged in the research and development, manufacture, and sale of healthcare products primarily focused on human health and well-being. The company offers a diversified range of products through the Innovative Medicine segment and MedTech segment.
On October 15, the company declared a quarterly dividend of $1.24 per share, payable on December 10, to shareholders of record on November 26. With 61 years of consecutive dividend growth, JNJ pays an annual dividend of $4.96, which translates to a yield of 3.03% at the current share price. Its four-year average dividend yield is 2.72%. Also, the company’s dividend payouts have increased at a CAGR of 5.6% over the past five years.
JNJ launched the VOLT Variable Angle Optimized Locking Technology Plating System in the same month. This launch enhances performance and increases efficiency and is also an evolution in technology within fracture management solutions. This innovative system should help JNJ strengthen its leadership in trauma care.
For the nine-month period that ended September 30, 2024, JNJ's sales to customers increased 4% year-over-year to $66.30 billion. Its gross profit rose 4.5% from the year-ago value to $45.96 billion. The company’s net earnings from continuing operations amounted to $6.84 billion, representing a 15.7% increase from the same period last year. Also, its net earnings per share from continuing operations for the period increased 24.1% year-over-year to $4.38.
As per the updated guidance for the fiscal year 2024, JNJ forecasts operational sales between $89.40 billion and $89.80 billion, reflecting a 6.6% increase from 2023, primarily driven by recent acquisitions. The company also expects adjusted EPS between $9.88 and $9.98.
Analysts expect JNJ’s revenue for the fiscal year (ending December 2024) to increase 4.3% year-over-year to $88.78 billion, while its EPS for the same period is expected to grow marginally from the prior year’s period to $9.95.
Over the past six months, the stock has surged 9.6%, closing the last trading session at $163.45.
JNJ’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
JNJ has a B grade for Value, Stability, and Quality. It is ranked #13 out of 161 stocks in the Medical - Pharmaceuticals industry. Click here to see the additional ratings for JNJ (Growth, Momentum, and Sentiment).
Northwest Natural Holding Company (NWN)
NWN provides regulated natural gas distribution services to residential, commercial, and industrial customers. The company also operates a mist gas storage facility and an appliance retail center and engages in gas storage, water and wastewater, non-regulated renewable natural gas, and other businesses.
On July 31, demonstrating its commitment to returning value to shareholders, the company declared the 69th consecutive quarterly dividend of $0.49 per common share. This dividend will be paid on November 15, 2024, to shareholders on record as of October 31, 2024.
NWN pays an annual dividend of $1.96, which translates to a yield of 4.83% at the current share price. Its four-year average dividend yield is 4.32%. Moreover, its dividend payouts have increased at a CAGR of 0.52% over the past three and five years.
On June 5, NWN entered into an agreement to acquire Infrastructure Capital Holdings (ICH). This acquisition will add approximately 4,200 water, wastewater, and recycled water customers across states, expanding to an expected 19,000 connections. It will also allow NWN to strengthen its position in the market.
For the second quarter ended on June 30, 2024, NWN’s operating revenues stood at $211.71 million, while the company reported income from operations of $15.71 million, indicating a 13.5% growth from the prior-year period.
According to the full-year 2024 guidance, NWN forecasts earnings to range from $2.20 to $2.40 per share. Street expects NWN’s revenue and EPS for the fiscal fourth quarter (ending December 2024) to increase 8.7% and 22.2% year-over-year to $386.47 million and $1.48, respectively.
Shares of NWN have gained 6.7% over the past six months to close the last trading session at $40.55.
NWN’s stance is apparent in its POWR Ratings. The stock has a B grade for Momentum and Sentiment.
Among the 59 stocks in the Utilities - Domestic industry, it is ranked #31. Click here to access additional NWN ratings (Growth, Value, Stability, and Quality).
Universal Corporation (UVV)
UVV engages in sourcing, processing, and supplying leaf tobacco and plant-based ingredients to food and beverage end markets worldwide. The company operates through two segments: Tobacco Operations and Ingredients Operations.
On September 4, UVV announced the opening of its enhanced Universal Ingredients Shank's manufacturing campus for $30 million. This expansion will add new technologies for processing that will increase the campus’ production capacity and also help expand product offerings to the customers.
Buoyed by strong financial performance, the company declared its shareholders a quarterly dividend of $0.81 per share, payable November 4, 2024, to common shareholders of record at the close of business on October 14, 2024.
UVV pays an annual dividend of $3.24, which translates to a yield of 6.37% at the current share price. Its four-year average dividend yield is 6.04%. Moreover, the company’s dividend payouts have increased at a CAGR of 1.3% over the past five years.
UVV’s sales and other operating revenues for the first quarter ended June 30, 2024, increased 15.3% year-over-year to $597.05 million, while its operating income improved by 56.1% from the year-ago value to $17.23 million. The company’s net income stood at $130 million compared to the prior-year quarter’s loss of $2.06 billion, while its EPS came in at $0.01 versus a loss of $0.08 per share last year.
The stock has gained 10.5% over the past year to close the last trading session at $50.88.
UVV’s fundamentals are reflected in its POWR Ratings. The stock has an A grade for Growth and a B for Value. It is ranked #7 out of 9 stocks in the B-rated Tobacco industry.
Beyond what is stated above, we’ve also rated UVV for Momentum, Stability, Sentiment, and Quality. Get all UVV’s ratings here.
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JNJ shares were trading at $164.30 per share on Wednesday afternoon, up $0.85 (+0.52%). Year-to-date, JNJ has gained 7.28%, versus a 22.14% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
