Investment Picks for Senior Citizens: Three Stellar Stock Options to Consider
Johnson & Johnson and Abbott Laboratories, two titans in the pharmaceutical industry, have once again caught the attention of investors, with The Motley Fool selecting three employees from Morgan Stanley for their dividend stock suggestions for retirees that included these companies.
Johnson & Johnson, a Dividend King with an impressive 62 consecutive years of payout increases, continues to stand tall. Its rock-solid balance sheet and effective handling of legal challenges have ensured its position as an attractive investment. Despite a decline in Stelara's sales, the company has increased its revenue and earnings guidance for 2025. Johnson & Johnson's broad business, diversified across pharmaceuticals and medical devices, has enabled it to navigate patent cliffs and stiff competition. Its drug portfolio consistently develops newer and better products, a testament to its innovative spirit.
Meanwhile, Abbott Laboratories, another Dividend King with 53 consecutive years of dividend increases, has also impressed. The company's strong and diverse operations in pharmaceuticals, nutritional products, diagnostics, and medical devices have fueled its growth. Abbott Laboratories expects its business to grow organically by at least 7.5% in 2022, and its diluted per-share profit for the second quarter of 2022 was $1.01. The company's dividend payout has increased by 64% since 2020, and it offers an above-average dividend yielding 1.9%.
Abbott's successors, Skyrizi and Rinvoq, are projected to generate sales of $25 billion in 2023, exceeding Humira's peak annual sales. This promising outlook, coupled with Abbott Laboratories' strong financials, makes it a compelling investment choice. The company's dividend growth has a compounded annual growth rate of 10.4%, and its payout ratio, if it maintains its profitability, would be around 58% of earnings.
AbbVie, Abbott's biopharmaceutical subsidiary, also shines. Its forward price-to-earnings ratio is 16.4, making its shares surprisingly cheap in a stock market priced for perfection. AbbVie's CEO, Rob Michael, expressed confidence in the company's growth prospects, stating they are "very well positioned to drive growth in this decade" with their current portfolio.
In conclusion, both Johnson & Johnson and Abbott Laboratories continue to demonstrate their resilience and growth potential, making them attractive investments for those seeking steady dividends and long-term growth.
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