2 Bulletproof Dividend Stocks to Buy in July

Owning dividend stocks is an easy way to build wealth. There are hundreds of companies that pay dividends regularly and by reinvesting them, you can continue a steady income flow. If you’re a passive income investor, you need to look for dividend companies that continue to pay dividends, despite the market ups and downs. 

A high yield is attractive but consistency is the key. Companies that pay regular dividends are profitable and capable of sustaining the payout. They have shown their strength during uncertain economic times and can outperform the market. Here are 2 bulletproof dividend stocks worth keeping an eye on. 

PepsiCo

When searching for bulletproof dividend stocks, it is essential to identify companies that can withstand economic uncertainty. One such company is the beverage giant PepsiCo, Inc. (NASDAQ: PEP). The stock is down 9.48% year-to-date and 16% in 12 months and the reasons for the drop are short-term in nature. If you are an investor looking to hold the stock for the next few years, PepsiCo will not disappoint. The stock has a dividend yield of 4.17% and the company has raised dividends for over 50 consecutive years. This shows that it has survived market volatility before and can continue doing so. 

For the first quarter, the company reported an EPS of $1.48 and a revenue of $17.92 billion. It saw a dip in volume but has taken necessary actions to improve the same in its North American market. PepsiCo has purchased Poppi, a prebiotic soda brand and it also plans to add more protein to its portfolio to meet consumer preferences. Besides owning some of the most popular brands like Quaker and Mountain Dew, PepsiCo has a global presence, making it a familiar name across households. 

Exchanging hands for $136, PEP stock looks cheap with a P/E ratio of 20.06. The company may not see revenue growth as it did in the past but the dividend remains safe with a payout ratio of 67%. It has invested over $5 billion in the business which will pay off in the coming years. Once consumer spending improves, it could gain momentum. PepsiCo has an attractive valuation and the dividends look promising, Buy the dip. 

Johnson & Johnson 

An undervalued dividend king, Johnson & Johnson Inc. (NYSE: JNJ) is a pharmaceutical giant with a massive upside potential. Up 7.8% year-to-date, JNJ stock is exchanging hands for $155 and has a dividend yield of 3.35%. The company has raised dividends for 63 consecutive years. 

JNJ’s long-term picture looks attractive. It has a diverse portfolio of drugs across different sectors including oncology, immunology, and neuroscience. The company has more than 10 drugs that generate about $1 billion in annual sales. The majority of its sales are driven by the innovative medicine segment and it reported an EPS of $4.54 in the first quarter.

Besides the strong pipeline, JNJ is making strategic investments in innovation and has acquired CAPLYTA which is a push into neuroscience and is projected to generate $758 million in revenue this year, which accounts for 10% of JNJ’s Neuroscience segment. The drug is expected to account for nearly half of JNJ’s neuroscience sales, significantly boosting its third-largest therapeutic area. 

The company is projected to generate $11.04 in EPS this year and $11.78 in 2027. JNJ’s diversified business model allows it to innovate across the entire disease spectrum instead of simply focusing on MedTech or pharmaceuticals. The management has increased its full-year operational sales guidance and aims to achieve 3.8% year-over-year growth. 

Investors need to look beyond the short-term litigation risks. JNJ may not have a very strong dividend yield but its dividends have remained consistent. The stock is trading at a discount and could see tremendous long-term growth. 

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