Did you know that a bad market isn’t technically a bear market until the S&P 500 benchmark index is at least 20% lower than its most recent peak? We’re not there yet. The index, which dropped precipitously for a few days before recovering, is about 19 percent below the high water mark it reached in January.
We’ve likely already emerged from a bear market, but it might be irresponsible of us to not be ready for the possibility of more severe conditions ahead. These two leaders in the healthcare industry are as solid as they come. Here’s why you can count on the growing dividend payments coming from these two healthcare companies over time.
Abbott Laboratories
You’ve undoubtedly seen one or more of Abbott Laboratories’ COVID-19 diagnostic products. If you can’t seem to locate any baby formula, you’re probably aware of this firm’s nutrition sector as well.
What you may not know is that Abbott Laboratories just paid its 394th quarterly dividend. For the past 50 years, the company has also increased its payout.
If you have diabetes, you’re probably already aware with the newest revolutionary drug Abbott Laboratories has produced in a long time.
The Freestyle Libre 3 was cleared by the FDA in May to continuously monitor blood sugar levels for up to 14 days at a time. The device is only the size of two stacked pennies, which is smaller than the continuous glucose monitoring (CGM) it may find itself competing against, the new G7 from Dexcom.
The G7 was designed by Dexcom for just 10 days of continuous wear, yet it has not been approved by the FDA. Abbott’s CGM sales could soar due to a lack of strong competition for the Freestyle Libre 3 in the United States, potentially eroding demand for COVID-19 tests.
Even though Abbott’s Freestyle Libre 3 seems like it’s on track to gain and maintain a prominent portion of the lucrative CGM market, shares of Abbott are about 23% under their peak that was reached in January.
In the first quarter, Abbott Laboratories Corp. (NYSE:ABT) stock provided a 1.7 percent yield at current values. While this yield doesn’t appear to be very attractive on its own, CGM sales might help it expand considerably.
Johnson & Johnson
Consider Johnson & Johnson if you are willing to accept a lower rate of growth in the future in exchange for a higher yield now. This healthcare giant is ideal for dividend investors, with an AAA credit rating and a 60-year history of consecutive dividend increases.
At the moment, there is a lot of interest in Johnson & Johnson because it will split its consumer goods sector into a separate new business in 2023. This implies that current investors will have two dividend-paying stocks for the cost of one in their portfolio.
In the meantime, its consumer goods business has not been a significant source of development for some time; however, its pharmaceutical company is more robust than ever. Tremfya is an example of a brand-new psoriasis therapy that had sales growth of 41% year over year in Q1 and is on track to produce $2.4 billion in revenue in 2022.
Johnson & Johnson has seen its quarterly payments nearly double in the last five years. The stock now pays a 2.5 percent yield, and after it starts its consumer business, investors will receive dividends that exceed or match those they are receiving presently.
If a robust consumer health segment isn’t holding it back, J&J’s soon-to-be streamlined operation will be able to provide outstanding development in the future. That makes it an excellent addition to any income-earning investor’s portfolio right now.
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