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10 Best Dow Dividend Stocks for 2012

Stocks in this article: MCD KO CAT UTX PG IBM MMM XOM JNJ HPQ

Johnson & Johnson

Liability Adjusted Cash Flow Yield: 6.4%

Dividend Yield: 3.63%

LACFY/10-Year Treasury Yield: 3.09

Return on Invested Capital: 29%

J&J is yet another Dividend Aristocrat that's cash-rich, yet annoyingly dabbles in ill-timed share repurchases. For instance, the company spent 3.12 times the money on share repurchases in 2008 (when the stock hit an all-time high) than in 2009, when the stock hit its lowest level since 2002.

Despite these managerial missteps, Johnson & Johnson (JNJ - Get Report) has a very attractive dividend that is solidly supported by free cash flow and backed up by a very strong balance sheet.

J&J won't make you rich overnight, but should offer income investors with steady, compounding growth (assuming that dividends are reinvested).

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