1. Johnson & Johnson
(JNJ - Get Report)
This diversified consumer health care giant has posted 27 straight years of earnings increases and 49 consecutive years of dividend hikes. In the past five years, sales have increased 4% annually to $61.6 billion, while earnings per share have grown 7% each year to $4.76 and dividends have risen 11% a year to $2.28 per share.
Product recalls of Tylenol and Motrin tarnished the company's reputation last year, but Johnson & Johnson appears to be on the rebound. The firm is benefiting from international expansion and a strong pharmaceutical pipeline, including Zytiga, a prostate-cancer treatment, and Xarelto, for stroke prevention. During the second quarter of 2011, Johnson & Johnson's sales improved 8.3% to $16.6 billion compared with the year-ago period, while earnings improved 5.8% year-over-year to $3.5 billion, or $1.28 per share.
Johnson & Johnson's financial strength is unsurpassed. The company has nearly $30 billion in cash, while debt sits at only $19 billion. Dividend payout ratio is conservative at 52%. The company trades at the same price-to-earnings ratio as the S&P (15), but offers a much better yield -- 3.6% compared with the index's 2.0% yield.