STOCK
|
YIELD
|
JNJ
|
2.71%
|
KMB
|
3.1%
|
Johnson
& Johnson or Kimberly Clark?
The stock market is going up because, in my opinion,
average investors are chasing the most recent winners. The most recent winners are the big
companies that pay dividends. They hear
over and over that these are the companies for income investors. They can’t get any income from bonds and
those stocks just keep going up. It’s
time to get in on this market at least a little.
Johnson
& Johnson, JNJ
I do not think you should buy a stock like Johnson
& Johnson, symbol JNJ at this time.
The dividend income has not kept up with the stock price. The stock price has gotten ahead of the
earnings. Earnings drive dividends and
the dividend is less than three percent.
If you already own JNJ and you receive more than three percent on your
basis, stick with it. You have a
winner. I think your dividend income
will continue to increase. But, if you
buy JNJ today, with only a 2.7 percent yield, and the stock retraces its gains,
you will be kicking yourself.
Kimberly
Clark, KMB
If you have to invest today because your money is
making you no money elsewhere, and you want what has worked lately, you could
go with Kimberly Clark, symbol KMB. You
still risk losing value on your basis if the stock price goes down, but your
basis will earn more than three percent and your income will increase every
year and eventually, KMB will again reach all-time highs again.
Stick with your discipline.
TheMoneyMadam
