Top Dividend Stocks to Consider Now (NYSE: JNJ),(NYSE: CVX),(NYSE: MRK)

Sometimes you are just looking for a good dividend stock of a solid company to get your portfolio stabilized a bit.  We present to you Johnson & Johnson (NYSE:JNJ), Chevron Corporation (NYSE:CVX) and Merck & Co., Inc. (NYSE:MRK).  We searched for dividend stocks that were yielding greater than 3%, had a payout ratio of less than 50% (to weed out companies that were paying too much and not re-investing in itself) and had a P/E ratio for the current fiscal year less than 20 (to search for some value).

Johnson & Johnson (NYSE:JNJ) currently boasts a strong dividend yield of 3.05% with the stock closing at $64.36 on Friday.  The forward looking P/E is pegged at 14.1 and is one of the higher in the company’s industry, potentially representing a little less value on the stock, but the dividend yield helps to offset that.  J&J has surprised 5 quarters running and the current estimate of $0.97 seems a reasonable target for the company to hit.  J&J’s stock recently broke out of trading range that had its resistance set at about $61 (purple line in chart below).  The stock is currently locked in an uptrend with no current short term resistance level showing (bullish sign), although if it pulls back to the $62.50 range, that could be a great buying opportunity.

Chevron Corporation (NYSE:CVX) has an even stronger dividend yield of 3.49%.  Chevron has surprised with earnings 3 of the last 5 quarters with 2 big misses in March and June 2009 earnings reports.  However, Chevron did post a LARGE surprise in December 2008 ($2.14 EPS actual vs $1.87 EPS projected at the time), so December 2009 may follow suit and show big gains.  Chevron is currently trading at the upper end of a trading range.  So, if the stock shows any weakness that sends the stock trading below $75 a share, it might worth snapping up a few shares prior to their earnings report that should come in late January.

Merck & Co., Inc. (NYSE:MRK) is the strongest dividend yielder of this field discussed with a 4.14% yield.  With a forward P/E of 11.2, it shows better value than most of its peers, only being beat by Eli Lilly & Co. (NYSE:LLY) which has a forward P/E of 8.4.  Merck has beat earnings estimates 4 out of the last 5 quarters, showing the slight disappointment in March 2009 earnings (posted $0.74 EPS versus $0.77 EPS expected).  Merck is also trading along the upper band of a trading range (purple line in the chart below).  If the stock were to show some weakness and pullback, a good buying opportunity may present itself if the stock were to trade anywhere below $34.