Could Kenvue Follow in the Footsteps of Johnson & Johnson and Become a Top Dividend Stock?
When you think of the products populating your medicine cabinet -- like Band-Aid bandages or Tylenol -- you might not think of Kenvue (NYSE: KVUE). After all, these items have Johnson & Johnson written all over them -- literally. The pharma giant developed those and other products to build a billion-dollar consumer health business. But, just recently, J&J spun off this unit into Kenvue, a separate entity that may devote all of its resources to further growing the business -- and rewarding shareholders.
Speaking of rewarding shareholders, Kenvue is off to a good start, initiating a dividend during its very first months of operation as an independent company. That means, whether the stock or the market rises or falls, you can generate income just by owning Kenvue shares. Of course, not every dividend stock is a top dividend player. But, with J&J as a role model of sorts, could Kenvue follow in that company's footsteps and become a top dividend player? Let's find out.
First, let's consider what it means to be a top dividend stock. Companies that have paid dividends every year over time, have increased these dividends annually, and offer a dividend yield above that of peers or the general market fit the bill. It's also important for these companies to have a financial situation that allows them to ensure dividend payments and growth, and that means strong free cash flow.
Source Fool.com
