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Johnson and Johnson is a name we are aware of since childhood. It is not just a pharmaceutical company but is an empire that has grown over the years. Whether it is bathing products or wipes and diapers, Johnson & Johnson is everywhere. A strong player in the consumer goods industry, the company has everything from wipes to vaccines. Johnson & Johnson provides all the means to maintain your health and wellbeing.
The company is highly stable and well-established in the Pharma industry. Making news for the Covid-19 vaccine, Johnson & Johnson has a strong history and a long way to go. The company is helping during the pandemic with its vaccine but it may not be the sole reason that you may have heard about it. If you are keen on owning a small part of the company, it is time to invest in Johnson & Johnson stock. Let’s see how you can go about it.
Step 1: Finding a broker that offers Johnson & Johnson stock
To invest in stocks, you need to open a brokerage account. Many online brokers help buy specific stocks for beginners who want to learn as they build their portfolios. Here are some great platforms.
M1 Finance is ideal for long-term investors who want to build a strong portfolio at low costs. It is not a robo-advisor and does not provide a financial advisor but it will allow you to make your decisions based on the financial goals. You can build a portfolio and manage it through a simple and user-friendly platform. Your portfolio will be broken down into a pie chart so that it is easy to understand how the assets are divided. It is also possible to choose one of the professionally built portfolios based on different investment strategies. It will serve as the base of the portfolio. You can invest in mutual funds, stocks, and ETFs. M1 Finance allows the purchase of fractional shares.
You can open an individual account, retirement account, joint investment account, and trust account. All the trades will be commission-free but you need to maintain a minimum balance of $100 for taxable accounts and $500 for retirement accounts.
A free trading platform, Robinhood allows you to buy Johnson & Johnson stock. It can be used on Apple iOS and Android phones as an app as well as online. You simply need to sign up and link the bank account to Robinhood to get some free stock from the company. There is no minimum deposit requirement and you can sign up for Instant and Cash accounts for no monthly fee. The cash account offers zero-commission trades but not instant deposit or settlement. You can choose to upgrade for $5 a month and get a Robinhood Gold account where you enjoy margin investing and borrow money from Robinhood to buy stocks. If you want to trade on margin, you need to deposit $2,000. It offers fractional shares so instead of buying one full share of stock, it is possible to buy a fraction of stock for as little as $1.
Johnson & Johnson is an American multinational corporation established in 1886. The company develops pharmaceuticals, medical devices, and consumer goods. It is one of the oldest and the most valuable companies in the world. Johnson & Johnson is one of the two U.S.-based companies that enjoys a prime credit rating of AAA, which is also higher than that of the United States Government. It was founded by two brothers, Edward Johnson and James Johnson. Their older brother Robert joined the company later.
Headquartered in New Brunswick, New Jersey, the company has 250 subsidiary companies and the operations are spread across 60 countries and products sold in 175 countries. Its brands include several household names of medications and first aid supplies. Some of its top consumer products are Band-Aid, Tylenol medications, Clean and Clear face wash, Johnson’s baby products, Acuvue contact lenses, and Neutrogena skin and beauty products.
After operating privately for 58 years, the company went public in 1944. It is registered on NYSE with ticker J&J.
Johnson & Johnson price history
One of the oldest and most established companies, Johnson & Johnson has grown over the years and it enjoys a strong reputation in the stock market. The stock debuted on September 24, 1944. The stock was priced at $37.50 a share. If you had invested $1,000 in the Johnson & Johnson IPO, you would have received 27 shares.
The company gave a 100% stock dividend three years after the IPO. This would have taken the stock to 54. Further, it issued 3 5% stock dividends which would take your stock holding to 61 by 1951.
It did a stock split in 1959, issuing 2.5 stocks for one stock. Your stockholding would be 152. It gave a 200% stock dividend and announced six stock splits till 2001. Considering the same, your stock holding today would be 65,664 shares. The current stock price is $169. Your holding would be worth $1,10,97,216. The regular payouts by the company show that they value investors and are looking forward to distributing their profit with the investors. Who said the stock market does not make you wealthy? From $1,000 in 1944 to $1,10,97,216 in 2021.
Johnson & Johnson dividend information
Johnson and Johnson has consistently paid cash dividends for 53 years. It is considered a dividend aristocrat and is the first choice of investors who are looking to generate passive income through dividends. It enjoys an annual dividend yield of 2.5% and recently paid a quarterly cash dividend of $1.06.
Best features of Johnson & Johnson stock
Largest healthcare stock. Johnson & Johnson is not solely a publicly-traded healthcare stock in terms of market cap but it is the most diversified company in terms of its offerings. The company’s main business is in pharmaceuticals and it has a portfolio of drugs that treat illnesses ranging from cardiovascular diseases to cancer and infectious diseases. The medical devices segment accounts for more than one-quarter of sales and instruments and surgical systems contribute to their revenue. The biggest advantage of investing in Johnson & Johnson stock is that the company does not rely on any one part of healthcare. It has spread its eggs in different baskets which makes the stock low risk and one of the largest and high-growth healthcare stocks.
Stable company for the long term. If you are looking for a stock to hold for the long term, nothing can beat the stability offered by Johnson & Johnson. Its diversification offers stability in all kinds of economic cycles. Even if there is a problem in one business unit, it will not dampen the sales and revenue of the company.
Covid vaccine. Johnson & Johnson is a company that has developed a single shot covid vaccine and it is found to be highly effective against different Coronavirus variants. Data shows that the vaccine generates a strong neutralizing antibody response that does not wane. The company has already generated $100 million in covid vaccine sales. The vaccine was approved late in February 2021, so this is only two months of sales. However, this is only 2% of the revenue for the company. A major advantage of the J & J vaccine is that it is a single shot, unlike other vaccines from Moderna and AstraZeneca which are double shots.
Dividend aristocrat. Johnson & Johnson is one company that has paid increasing dividends for the past 59 years and it is no small feat. A dividend yield of 2.6% is respectable and due to the consistent payout and rise in the dividend, those who purchased the stock two decades back have seen their investment grow significantly. Johnson & Johnson is a dividend grower that should be held for the long term. Most importantly, the company has enough room to keep increasing the payout. The management still has a conservative approach towards the dividend payouts which shows that the dividend can increase soon. Plus, the dividend is not going anywhere.
Strong acquisitions. Johnson & Johnson is highly stable and has solid cash flow which allows it to do mergers and acquisitions. The company has been buying its way into the high-growth areas. It has been eyeing medical device companies that bring data science and robotics to the operating room. It acquired Verb Surgical and Auris Health in 2019. Auris Health is a company that has a robotic surgical system focusing on the lungs. New capabilities brought in by the two companies can lead to new revenue sources in the coming years.
Pharmaceuticals have massive growth potential. The pharmaceutical segment of the company is the fastest-growing of all the business units. It has 24 drugs that generated more than $400 million in revenue in 2020 and 14 drugs that generated more than $1 billion. One of its most successful drugs, Stelara is a treatment for plaque psoriasis and psoriatic arthritis which made up for 9% of the total revenue of the company in 2020. If the company keeps pace, one can expect a revenue as high as $91 billion in 2030.
The consumer health segment is an anchor. The consumer health business is a familiar name for shoppers and it has a presence across the world. Baby products, oral care products, pain relievers, and beauty suppliers make up a large part of the annual sales. The segment has grown more than 1% year over year in 2020. This segment will continue to generate stable revenue for the company for the decade.
Step 3: Open an account & buy Johnson & Johnson shares
Now that you are ready to buy the shares, it is time to open an online brokerage account. You can enjoy low-cost purchases and quick execution with the right account. Let’s take a look at M1 Finance for details on how to open the account. Open the M1 Finance website and click on Get Started.
Now you need to provide the email address and password. You will then have to verify the email to start. At the next step, you must create a pie. You can choose any three stocks from all the options available and the pie will be ready for you.
Once you pick the stocks, you need to provide an investment horizon. Choose from short, long, or average, and then choose the type of investment account you want and fund it. After you link it to the bank account, you can begin the investment journey immediately.
Once you create an account with M1 Finance, you should decide the price of the stock and the number of shares you want to buy. You can also purchase fractional stock. There are two options- limit price and market price. If you set the limit price, you need to set a limit for the purchase and the order will only be executed when the stock hits the limit price. If you set the market price, the order will be executed immediately at the prevailing stock price.
How much were Johnson & Johnson shares when the company first went public?
Johnson & Johnson's stock price was $37.50 when it first went public in 1944.
How much does it cost to buy Johnson & Johnson shares today?
As of closing on July 2, 2021, Johnson & Johnson shares cost $168.98.
Does Johnson & Johnson pay dividends?
Johnson & Johnson pays a cash dividend and is a dividend aristocrat. It has paid dividends for 59 years.
What is the minimum number of Johnson & Johnson shares that I can buy?
You can purchase one share or a fractional share if you use the right brokerage.
The bottom line
If you are looking to build a portfolio with a stellar stock to buy and hold forever, Johnson & Johnson is the one to pick. It has a strong history, enjoys a very strong reputation in the industry, has stellar fundamentals, and is highly reliable. With online brokerage accounts like Wealthfront, M1 Finance, or Robinhood, you can enter the world of the stock market and invest in Johnson & Johnson.
If you choose the right online brokerage, you will also be able to buy fractional shares. You must keep in mind that the market is volatile and it will have ups and downs. But when you choose a stock like Johnson & Johnson, there is not much you need to worry about. Your investment is only going to grow in the coming years.
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