Latest / Dividend Investing with Fexingo: Income Stocks, Yield, and Long-Term Cash Flow Portfolios / How Johnson and Johnson Defied the Tech Selloff in June 2026
Transcript
- Lucas: Johnson & Johnson just had its best week in months. Up seven point two percent in five trading days while the Nasdaq lost over four percent. And the interesting part is that JNJ didn't do anything flashy — no surprise earnings, no blockbuster drug approval. It just sat there being a dividend aristocrat while the rest of the market rotated hard into safety. Luna: Seven point two percent is big for a stock that usually moves half a percent on a busy day. So what actually drove it? Lucas: The ten-year Treasury yield dropped from four point five percent to four point four one percent over the same stretch. That's a meaningful decline in just five days. And when bond yields fall, sectors like healthcare, utilities, and consumer staples tend to rally because their future cash flows become more valuable in present value terms. JNJ is the poster child for that dynamic. Luna: Right — the dividend discount model works in reverse. Lower discount rate, higher present value. But wasn't there also a Fed comment this week that spooked growth stocks? Lucas: Yeah, Chicago Fed President Goolsbee said inflation is still too high. That pushed the Nasdaq down further because rate-sensitive tech names sold off. But JNJ barely flinched. Its beta is something like zero point six — it just doesn't move that much with the broader market. And that's exactly the point of owning it in a dividend portfolio. Luna: So the money that came out of tech went into reliable dividend payers. I saw Altria was up nearly six percent as well. That fits the pattern. Lucas: Altria, ticker symbol M-O, up five point nine percent. That's a stock with a seven-plus percent dividend yield. When investors get nervous about growth, they look for yield that actually pays them while they wait. And Altria, despite all its legal and regulatory headwinds, still generates enormous free cash flow from its tobacco business. The market rewarded that this week. Luna: Even Realty Income, ticker O, was up three percent. That's a triple-net lease REIT that pays monthly dividends. So we're seeing a broad rotation into income names. Lucas: Exactly. And I think the key takeaway for dividend investors is not to chase the hot sector. The S&P 500 was down one point nine percent this week, the Dow was actually up zero point seven percent. So the rotation is real. If you hold high-quality dividend stocks with a long history of raising payouts, weeks like this remind you why. Luna: Let's dig into JNJ specifically. They've raised their dividend for over sixty consecutive years. That's a Dividend King. But how does that translate into the stock's performance this week? Lucas: It's about certainty. JNJ's revenue is diversified across pharmaceuticals, medical devices, and consumer health. About half comes from outside the US. That global diversification means no single product line or region can sink the company. And with a payout ratio around forty-five percent of earnings, the dividend is well covered. So when the macro environment gets shaky, investors pay a premium for that reliability. Luna: And the yield on JNJ right now is about three point one percent. That's not the highest in the market, but it's solid and it grows. Compare that to the ten-year Treasury at four point four — stocks need to offer a growth premium. Lucas: Right, and JNJ's dividend growth has averaged about six percent annually over the past decade. So you're getting a starting yield that's below the ten-year, but you're also getting a stream of income that rises faster than inflation. For a retiree or an income-focused investor, that compounding matters. Luna: What about the flip side? If Treasury yields start climbing again, wouldn't that pressure JNJ? Lucas: Absolutely. The ten-year yield was above four point five just a week ago. If it jumps back to four point seven or higher, defensive stocks could give back some gains. But the long-term thesis doesn't change. JNJ has raised its dividend through every rate cycle since the 1960s. Short-term price volatility is noise if you're holding for the income. Luna: And that's the mindset this show is built around. Lucas, I want to mention something — a handful of listeners support the show through buy me a coffee dot com slash fexingo. That direct support is what lets us keep doing deep dives like this without any ads or sponsors. Lucas: Yeah, it genuinely makes a difference. We don't run commercials, so that listener funding is what keeps the lights on. If our conversations about dividend stocks or portfolio strategy have helped you think about your money differently, that's the place to chip in. And we really appreciate those who already do. Luna: Exactly. Back to the data — one more interesting thing: Verizon was up one point five percent this week too. Another high-yield name at around six percent. The rotation into telecoms and utilities is broad. Lucas: Verizon's yield is tempting, but investors should look at its debt load. The company has over one hundred fifty billion dollars in long-term debt. That's manageable with its cash flow, but it's a risk if rates stay higher for longer. JNJ has a much stronger balance sheet, with an AA credit rating. So not all high yields are created equal. Luna: So the big lesson this week: when growth stocks get crushed, dividend aristocrats shine. But don't buy them just for the defense — buy them because you believe in the long-term compounding. Lucas: Exactly. JNJ is a great example of a stock that pays you to wait. Whether the market is up or down, the dividend keeps coming. And that's the whole point of dividend investing.