Johnson & Johnson is a Triple Threat That’s Well Worth Your Investment

Johnson & Johnson (NYSE:JNJ) stock has been volatile for the last several years, and 2020 has been no exception. But as more clarity develops surrounding the novel coronavirus, the blue-chip company is beginning to show exactly why it’s a solid investment.

Johnson & Johnson is positioned to benefit in a number of different ways. To begin with they are one of the companies that are leading the way towards the development of a Covid-19 vaccine. But the company is also is known for its consumer packaged goods which flew off shelves in March and April and should continue to have strong demand for the foreseeable future. Plus, the company has a very solid balance sheet which means that its dividend should be very secure.

This means whether you’re looking for growth or income, JNJ stock is a solid bet.

The Race For a Vaccine is On

Covid-19 and the novel coronavirus that causes it will be part of our nation’s vocabulary, and psyche, for quite some time. Public policy experts will debate for a long time the wisdom, and/or necessity, of effectively shutting down the U.S. and global economy in efforts to flatten the curve.

But the virus is also part of our national conversation because of the race for a cure. Right now, that means a two-track approach. On the one track are companies that are producing anti-viral treatments that will mitigate the worst symptoms, which will make the virus less deadly. This is akin to the treatments that were developed to treat HIV, the virus that causes AIDS.

The other track is to create a vaccine that would, theoretically, eradicate the virus. This would, in particular, remove the concern about asymptomatic progression.

Both of these approaches can help investors make a lot of money. In the case of anti-viral treatments, the stock of a company like Gilead Sciences (NASDAQ:GILD) has been up and down on news of its drug remdesivir as a potential treatment for Covid-19.

But the race for the virus is really where it’s at. And that’s one reason why Johnson & Johnson is a strong buy right now. There are currently over 100 companies and organizations working on vaccine candidates to treat Covid-19. However, J&J is one of only five companies that will receive the full backing of the federal government. Johnson & Johnson along with Moderna (NASDAQ:MRNA), Merck (NYSE:MRK), Pfizer (NYSE:PFE) and AstraZeneca (NYSE:AZN) are the five companies that are viewed as the most likely to be successful.

One reason for J&J to be picked is because the company has the ability to get vaccines produced at the scale that will be needed. The company recently announced it would begin early phase trials for its vaccine candidate in late July, more than a month ahead of schedule.

Johnson & Johnson is An All-Time Defensive Stock

Investing based on a virus candidate may be too risky for some investors. But another reason to buy Johnson & Johnson stock is because of the company’s role as a defensive stock. The nation is in a recession (real or confirmed).  More than one in four American workers has lost a job during the pandemic. There have been more unemployment claims filed in the last three months than the 37 million claims in the Great Recession. The economy will come back, but it may not come back as fast as economists were hoping for. And that means that budgets will be tightened. Which makes the products that Johnson & Johnson produces essential budget items.  One reason for the volatility in JNJ stock has been the thought that consumers bought all they needed to buy.

But with the virus likely hanging around until there is a vaccine or treatment, many people will still want to make sure they have a stockpile of the standard cold & flu therapies.

Buy JNJ Stock For the Dividend

If neither its potential to have a vaccine or its consumer goods business excites you, then you can simply buy Johnson & Johnson stock for its dividend. While not the highest (in terms of yield) of other dividend stocks, it is by far one of the most secure dividend stocks you can own.

JNJ stock is trading at 22x earnings. That’s not cheap, but it’s a quality stock. The company is a dividend king that has raised its dividend for the last 57 consecutive years. And for the last 10 years, the company has maintained an annual dividend growth rate of 6%. When you compare J&J’s 2.8% yield and 6% annual growth to the S&P 500 average of a 2% yield, J&J is a no-brainer for dividend investors.