1. Johnson & Johnson ( JNJ) Yield: 4% 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.