Six Percent and Sustainable

Dividend Income plus the growth of the investment.

Since I “retired” I have made more banana bread and oatmeal raisin muffins in the last twelve months than I have in the previous 67+ years. I should have the recipes memorized, but I don’t. But I have memorized the recipe for easy income growth from stocks. Dividend growth is a secret and simple recipe for growing income in retirement.

It is hard to find a company with dividend growth for more than 50 years. J&J has been growing their dividend since I was 12 years old. What is amazing is that JNJ has a decent yield and a very rational dividend payout ratio. We own 100 shares of JNJ, so we can reasonably expect to see income from this one investment of $404 in the next twelve months, at which time I expect to see the next dividend increase. Of course, a pandemic can turn things upside-down. But the board of directors would not be offering a 6% increase if they felt the dividend was not sustainable.

Seeking Alpha Scorecard – 57 years, 6% growth and 47% payout ratio.
Johnson & Johnson Dividend Growth Chart from Seeking Alpha.