This High-Yielding Dividend Stock Is Now Oversold

Declining dividend stocks can make attractive buys on the dip. As long their financials remain sound, investors have the opportunity to get a better-than-normal yield. One stock that has been falling sharply of late is healthcare company Johnson & Johnson (NYSE:JNJ).

The fall has been severe enough to put the stock into oversold territory. Last week, it finished with a Relative Strength Index (RSI) of just over 29. When RSI falls below 30, that indicates to investors that there has been a lot of selling pressure of late, and that the stock may be due for a recovery.

The stock finished the week just above $165 per share, which remains well above its 52-week low of $155.72. But in the past month, its shares have dipped 6%.

The most recent announcement the company made was the news that it would stop selling talc-based baby powder next year. It already stopped selling the products in Canada and the U.S., but as of 2023, it will go a step further and stop selling them globally. The company's talc-based baby powder products have resulted in tens of thousands of lawsuits, with consumers alleging that using the products led to them developing cancer.

It's unlikely that was what sunk the stock, however. Instead, it could be part of the shift of investors moving more funds back into higher-growth stocks and away from more conservative picks like Johnson & Johnson. Either way, for dividend investors, this could be an advantageous time to buy the stock on the dip. Today, Johnson & Johnson yields 2.7% per year, more than a full point better than the S&P 500 average yield of 1.6%.