Jim Trippon CPA

Dow component Johnson & Johnson (NYSE: JNJ) reported first-quarter earlier this week and April is usually the month on the calendar when JNJ raises its dividend.

The pharmaceuticals and consumer staples giant did not disappoint investors as the company said it will boost its quarterly dividend by five cents, or 10.2%, to 54 cents a share.

Last week, we talked about the dividend legacy of Procter & Gamble (NYSE: PG), which has raised its payout for 54 consecutive years, but JNJ is no slouch either when it comes to a strong heritage of dividend increases. With its latest increase, JNJ has now raised its payout for 48 consecutive years.

While the company did lower its full-year guidance on Tuesday, this is still a stock long-term income-seeking investors can cozy up to. The new dividend takes the yield above 3% and the payout has more than doubled in the past six years.

The valuation is fair as JNJ shares trade at 13 times 2010 earnings and 11 times 2011 earnings. In addition, the company is taking steps to rein in costs.

Those efforts could save the company as much as $900 million this year and up to $1.7 billion next year and that will only serve to strengthen an already strong balance sheet. We think a 49th consecutive dividend increase from JNJ is nearly a foregone conclusion.