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10 Dow Dogs That Are Barking for Gains

Johnson & Johnson

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Next up is Johnson & Johnson (JNJ), a health care products stock that takes the No. 5 spot on the Dogs of the Dow list thanks to a 3.5% dividend yield. I like to say that Johnson & Johnson is the "prototypical blue-chip stock " -- the firm boasts a large, defensible business, a massive hoard of cash (around $12.6 billion net) and name recognition that few firms enjoy.

All of those factors make JNJ a firm that investors shouldn't ignore.

Johnson & Johnson's business includes everything from consumer products like Band-Aid brand bandages to pharmaceuticals and medical devices. While that pharma exposure comes with the same concerns we're seeing at MRK and PFE, outsized consumer exposure dramatically reduces that risk. Right now, pharmaceuticals make up just over a third of JNJ's sales, versus more than 90% at Pfizer, for example.

That makes this firm a solid core income holding for investors searching out Dow Dogs for their portfolios.

I also featured Johnson & Johnson, one of the highest-yielding drug stocks, in 5 Cash-Rich Stocks to Buy in 2012.

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DD $64.18 0.80%
CVX $101.87 0.44%
MRK $53.60 -0.91%
T $38.98 0.62%
AAPL $92.69 -0.59%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

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