Once again, here I am, capital in hand ready to be deployed in order to increase my dividend income stream. I have to say, this is one of the non-financial advantages of this strategy, the happiness and thrill I get when something happens: deploying capital, receiving a dividend, seeing a dividend increase, seeing the price of a company I want to own go down, seeing the price of a company I own go up. Every single one of these small steps really feels fulfilling, knowing that each step is moving me closer and closer towards financial independence.
As anyone that follows the market knows, there are many claims that the prices are too high at the moment, with some people going as far as saying we are due for a strong correction. Honestly, due to this approach of acquiring good quality companies at good prices, I literally don't care about what's going to happen to the market. If a strong correction comes, I'll be happy, as I can make my acquisitions for a lower price. If it doesn't, I'll keep looking for companies that I consider reasonably valued and will continue buying them.
While I basically ignore the general market and noise, I got to say that the current overall prices make it much harder to find good value at reasonable prices. There are several companies that interest me a lot, but at this point are sporting a price that I deem to high. So, of all the companies in my interest list I decided to go for Johnson & Johnson (JNJ). I consider the current price to be fair for a company of this quality and while I don't believe it presents a discount, it is still a great deal. As Warren Buffet said once: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price".
Regarding Johnson & Johnson (JNJ), I believe it doesn't need any introductions. It's one of the oldest Healthcare companies and probably the most well known due to their over-the-counter consumer goods division.
This company is one of the most impressive of the already impressive dividend aristocrats constituents. It has increased it's dividend for 52-consecutive years, having a recent average increase of around 7%. They sport very healthy debt, great Return-on-equity and consistently grow earnings at a compound annual rate of around 6%.
Apart from the great balance sheet, what interests me the most in this company is that it is perfectly diversified both geographically and division-wise. Their geographic footprint also allows them to play aggressively in emerging markets where most of the growth is expected to come from. Furthermore, they operate in a sector forecast to grow immensely in the years to come due to an increase in aging population and technology advancement.
All in all, considering the current dividend yield, usual growth, track record, sector and performance, this is probably my favorite company and one that I feel confortable buying indefinitely.
Stock Price: 101.5$
Dividend Yield: 2.75%
Dividend Raise Streak: 52 Years
Typical Yearly Dividend Growth (5yr): 7%
What about you? Where are you finding value these days?