The cash out refi won’t be funded until later this week, but I decided to get an early jump on deploying some of that capital this morning. I should have ~$94,000 to work with, and although I will set aside a portion of that for cash reserves, I do intend on utilizing the bulk of it for investments.
This morning, I put in a market order to purchase 50 shares of Johnson and Johnson (JNJ) for $99.97/share.
Johnson and Johnson is one of the finest dividend growth stocks out there and needs no introduction. As a Dividend Aristocrat, JNJ has rewarded shareholders by increasing dividends for 52 consecutive years. This is one of the few stocks where you really can simply ‘buy and hold’.
The current dividend yield is about 2.80% which is respectable. The current yield isn’t going to set the world on fire in the realm of dividend stocks, but oftentimes you have to pay a premium for quality. I have no problem doing that, and JNJ is a stock that I would like to make a Core Holding in my portfolio.
The 5 year dividend growth rate is a more impressive 7.4%. The forward P/E is about 16, with a 5 year average of 17.5. So, again, outside of a severe market correction or major company misstep, it’s going to be pretty tough for an investor to swoop in and ‘steal’ shares of JNJ. Cash-secured puts might be a good way to try and purchase the stock at a cheaper entry point, but since I’m just getting re-started with rebuilding my portfolio, I’m going to try and keep things a tad more simple for now.
In the near future, I will put together a Watchlist of stocks that I’m currently monitoring. In general, like everyone else, I like to try and find value with stocks, which typically occurs after the market pummels a company for missing earnings and the stock responds by tanking in the proceeding days… But I don’t believe there’s ever really a ‘one size fits all’ strategy for investing… Oftentimes, a high quality holding will just keep on going up, up, and up through the years…
But if you believe in the stock, there’s no need to overcomplicate things. With JNJ, I’m doing exactly that, and am simply going to ‘set it and forget it’.