Many investors favor investing in dividend stocks, offering continuous growth over the years. Large, well-established companies from industries like medicine and utilities with predicted cash flows offer solid dividend growth to their investors.

Given this backdrop, it could be wise to invest in quality dividend stocks Johnson & Johnson (JNJ), Lowe's Companies, Inc. (LOW), and Target Corporation (TGT) for long-term wealth.

Amid the ongoing economic uncertainties and geopolitical risks, investors are seeking investments with stable income flow, and dividend stocks emerge as an ideal choice for their resilience during market fluctuations.

Companies that have paid dividends for decades are outshining their non-dividend counterparts. The companies’ payouts have grown significantly over the years, offering higher and more reliable returns, a stable income stream, protection against inflation, and long-term growth.

Over the 12 months ending September 2024, U.S. common dividend marked increases of $74.70 billion, up 16.9% from the previous year’s $63.9 billion. Also, on a per share basis, S&P 500’s third quarter 2024 dividend payments set a record, as payments grew 2.2% to $18.68 per share from $18.28 in the second quarter of 2024.

Hence, stocks of well-established companies from sectors like medical, home improvement, and consumer goods, having stable earnings, predictable cash flows, and a strong commitment to reward shareholders are suitable portfolio additions. The stocks will provide reliable passive income, long-term wealth creation prospects, and stability in the turmoil environment.

Given these factors, let’s delve deeper into the fundamentals of the top dividend growth stocks: JNJ, LOW, and TGT.

Johnson & Johnson (JNJ)

JNJ and its subsidiaries research, develop, manufacture, and sell various products in the healthcare sector internationally. The company operates through the Innovative Medicine and MedTech segments. It provides products for various therapeutic areas, like immunology, including rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis.

On November 18, JNJ announced positive topline results from ICONIC-LEADa, a pivotal Phase 3 investigational study of icotrokinra (JNJ-2113), the first targeted oral peptide that selectively blocks the IL-23 receptor in patients with moderate to severe plaque psoriasis (PsO). The Phase 3 study met its co-primary endpoints, where over 74% of patients achieved clear or almost clear skin at week 24.

On October 15, JNJ’s Board of Directors declared a cash dividend of $1.24 per share on its common stock for the fourth quarter of 2024. The dividend is payable on December 10, 2024, to shareholders of record at the close of business on November 26, 2024.

JNJ pays an annual dividend of $4.96, which translates to a yield of 3.20% at the current share price. Its four-year average dividend yield is 2.73%. Moreover, the company’s dividend payouts have increased at a CAGR of 5.6% over the past five years. JNJ has raised its dividends for 61 consecutive years.

For the nine months that ended September 30, 2024, JNJ’s reported sales increased 4% year-over-year to $66.30 billion. Its gross profit grew 4.4% from the year-ago value to $45.96 billion. The company’s net earnings from continuing operations of $10.64 billion and $4.83 indicate growth of 15.7% and 24.1% from the prior year’s period, respectively.

Analysts expect JNJ’s EPS for the fiscal year (ending December 2024) to increase marginally year-over-year to $9.96, and its revenue is estimated to grow 4.3% year-over-year to $88.78 billion for the same year. Moreover, the company surpassed the consensus EPS estimates in each of the trailing four quarters.

JNJ’s stock has soared 1.1% over the past six months and 2.1% over the past year to close the last trading session at $153.

JNJ’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has a B grade for Stability, Quality, Sentiment, and Value. Within the Medical - Pharmaceuticals industry, JNJ is ranked #13 among the 155 stocks.

Click here to access additional JNJ ratings for Growth and Momentum.

Lowe's Companies, Inc. (LOW)

LOW operates as a home improvement retailer. The company provides products for construction, maintenance, repair, remodeling, and decorating. It also offers home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens, and baths.

On November 15, LOW’s Board of Directors declared a quarterly cash dividend of $1.15 per share, payable on February 5, 2025, to shareholders of record as of January 22, 2025.

LOW’s annual dividend of $4.60 translates to a dividend yield of 1.69% at the current share price. Its four-year average dividend yield is 1.67%. Also, the company’s dividend payouts have increased at a CAGR of 17.1% over the past three years. Lowe’s has raised its dividends for 61 consecutive years.

On November 4, LOW introduced its Digital Home Platform, exclusively available to MyLowe's Rewards members. The platform offers free, personalized information about products in the houses, including warranties and manuals, maintenance suggestions and how-to content, recommended subscriptions, and replacement parts from the palm of their hand.

During the third quarter that ended November 1, 2024, LOW reported net sales of $20.17 billion, and its operating income was $2.54 billion for the quarter. The company's net earnings came in at $1.69 billion, while its adjusted EPS was $2.89 for the quarter, respectively.

In addition, the company’s cash and cash equivalents stood at $3.27 billion as of November 1, 2024, compared to $1.21 billion as of November 3, 2023.

The consensus EPS estimate of $4.24 for the second quarter (ending July 2025) represents a 3.5% improvement year-over-year. The consensus revenue estimate of $23.86 billion for the same quarter represents a 1.2% increase from last year. The company has an impressive surprise history; it surpassed the consensus EPS estimates in all of the trailing four quarters.

LOW’s stock has surged 13.1% over the past six months and 26.8% over the past year to close the last trading session at $259.26.

LOW's bright outlook is reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

The stock has a B grade for Quality and Sentiment. LOW is ranked #15 among the 57 stocks in the B-rated Home Improvement & Goods industry.

Click here to access LOW’s other ratings for Growth, Momentum, Stability, and Value.

Target Corporation (TGT)

TGT operates as a general merchandise retailer. The company offers a line of apparel for women, men, boys, girls, toddlers, and infants and newborns. It also offers jewelry, accessories, shoes, beauty and personal care, baby gear, cleaning, paper products, and pet supplies.

On October 22, TGT announced its intention to lower regular prices on over 2,000 products across owned and national brands this holiday season, which could boost its sales.

On September 18, TGT’s Board of Directors declared a quarterly dividend of $1.12 per common share.  The dividend is payable on December 10, 2024, to shareholders of record at the close of business on November 20, 2024.

TGT’s annual payout of $4.48 equates to a yield of 2.86% at the current share price. The company’s four-year average dividend yield is 2.30%. Also, its dividend payouts have increased at 12% CAGR over the past three years. Target has raised its dividends for 56 consecutive years.

TGT reported total revenue of $25.45 billion for the second quarter that ended August 3, 2024, up 2.7% year-over-year. Its operating income grew 36.6% from the year-ago value to $1.64 billion, fueled by higher sales and an improved gross margin rate.

Furthermore, the company’s net earnings came in at $1.19 billion or $2.57 per share, reflecting growth of 42.7% and 42.8% from the prior year’s quarter, respectively.

Analysts expect TGT’s revenue for the third quarter (ended October 2024) to increase 2% year-over-year to $25.90 billion. The consensus EPS estimate of $2.30 indicates a 9.5% rise year-over-year. Also, the company has topped the consensus revenue and EPS estimates in three of the trailing four quarters.

Shares of TGT have gained 1.4% over the past month and 20.3% over the past year to close the last trading session at $156.

TGT’s POWR Ratings reflect its robust outlook. TGT has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

The stock has a B grade for Quality, Momentum, Growth, and Value. It is ranked #8 among the 36 stocks in the A-rated Grocery/Big Box Retailers industry.

Click here to access additional TGT ratings for Stability and Sentiment.

What To Do Next?

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JNJ shares fell $0.10 (-0.07%) in premarket trading Wednesday. Year-to-date, JNJ has declined -0.16%, versus a 25.55% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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