Johnson & Johnson (JNJ - option chain) shares are rising today after the company announced that its blood-thinner rivaroxaban, which it is developing with Bayer AG, was more effective in a study than the standard treatment warfarin in preventing stroke in patients with irregular heart rhythm. The results could bring the treatment one step closer to regulatory approval in the US. While JNJ is not up a big chunk today, this stock is usually very steady, so this 1% move is actually more significant thatn it looks. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNJ.

Reportedly, a U.S. House committee found a bit more about Johnson & Johnson (JNJ) recalls than it wanted during a recent investigation into last year's recalls. Remember, Johnson & Johnson had a massive recall of some of its over-the-counter (OTC) medicines.

Turns out that the House Committee on Oversight and Government Reform announced Tuesday that it obtained an e-mail highlighting an agreement between the FDA and Johnson & Johnson that would allow the company to "conduct an unpublicized recall of adult Motrin." Motrin is produced by Johnson & Johnson's McNeil consumer medicines, and this is the unit that was allowed to carry out the "phantom recall."

"Fear is back and it can be seen in the internals. So what is one to do? What we always do: identify quality, establish value, and take advantage of opportunity when it presents itself," suggests Kelley Wright.

The editor of Investment Quality Trends -- an advisory service that assesses blue chip stocks by analyzing their historic dividend yield levels -- adds, "While all ships go out with the tide, value is eventually rewarded. Remember, we are in this for the long haul.

"Our current Timely Ten -- featured below -- is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years. Do we believe that all 10 will go up simultaneously or immediately? Of course not.

The editor of The Moneypaper explains, "The pair developed a Net Current Asset Value (NCAV) model to determine if a company was worth its market price. Their formula subtracts all liabilities, including short-term debt and preferred stock, from a company's current asset balance"

Looking for dividend-paying blue chip stocks? Chuck Carlson is a leading expert on dividend reinvestment plans.

In The DRIP Investor, he looks at the 10/10 Club -- stocks that have boosted their payouts by 10% a year for at least 10 years. He explains,"The table below features seven stocks that belong to the exclusive '10/10' club:

"Johnson & Johnson (NYSE: JNJ) has vast holdings, but its strategy is simple: Support a deep pipeline of new drugs and medical devices with an aggressive acquisition strategy and cost controls," notes blue chip investor Richard Moroney.

In his Dow Theory Forecasts, he adds, "And despite the recession, J&J has kept its financial footing, remaining one of the few companies with the top credit rating of AAA." Here's his long term outlook.

"This year the U.S. pharmaceutical market is expected to contract for the first time in 50 years as fewer people visit doctors or start new therapies for chronic conditions.

"Beyond 2009, an economic recovery should reinvigorate J&J, though it is too early to determine whether health-care reform will help or harm the company.

"Health-care stocks have been volatile of late, as the prospects for significant healthcare reform are impacting the group," notes Chuck Carlson.

In The DRIP Investor, he explains, "Johnson & Johnson (NYSE: JNJ) has not been immune to the weakness. And while these shares could remain under pressure in the short run, the company's prospects are significantly brighter than the typical health-care stock."

"First, Johnson & Johnson's diversified business portfolio, which includes pharmaceuticals, medical technology, and consumer products, should help to smooth out results and cushion declines in any one area.

Alcoa Inc. (NYSE: AA) started off the new earnings season with disappointing results that helped to stifle the recent rally. Was that enough of a sign of what's to come? No, probably not. But the earnings reports start to fly in earnest this week, which should provide a more detailed picture of the state of things.

Analysts surveyed by Thomson Reuters anticipate that some of the biggest names will prove to be holding their own. Google Inc. (NASDAQ: GOOG) is expected to post a profit of $4.91 per share, marginally higher than a year ago, and Johnson & Johnson's (NYSE: JNJ) expected $1.22 per share profit is slightly lower year over year. Even Mattel Inc.'s (NYSE: MAT) estimated loss of $0.13 per share is the same as in the year-ago period.

"Long-time healthcare investors can be forgiven their confusion; drug stocks are supposed to be defensive, but many of the largest drugmakers have been pounded," observes Richard Moroney.

Nevertheless, in the blue chip Dow Theory Forecasts, the advisor sees two favorite healthcare and pharmaceutical issues as long-term opportunities: AstraZeneca (NYSE: AZN) and Johnson & Johnson (NYSE: JNJ).

Moroney explains, "Healthcare companies' profits are supposed to remain fairly steady regardless of the economic situation. But hospitals' capital spending fell in the December quarter, and many consumers are putting off medical care because they cannot afford it.

The Procter & Gamble Company (NYSE: PG) is a blue-chip Dow component, but that doesn't mean it can't have a challenging quarter or two (or three or four or five, depending on how bad the recession gets).

According to this article, P&G believes its top-line sales revenue won't be as good as previously expected. This is due, in part, to how the dollar has been trading as of late against foreign currencies. However, fear not, shareholders, because earnings per share should be fine and remain the same. Management believes that Q2 will see somewhere between $1.58 and $1.63 per share, and it is looking for the fiscal year to fall between $4.28 and $4.38 per share.

The question is, will management turn out to be correct? If the recession continues to worsen, can this guidance be trusted? Quite honestly, it wouldn't surprise me if estimates were trimmed later on. P&G will see intense competition from generic brands, you can bet on that. But I can't say that P&G shareholders should care that much. After all, P&G, like Johnson & Johnson (NYSE: JNJ), Kraft Foods, Inc. (NYSE: KFT), and PepsiCo, Inc. (NYSE: PEP), is a consumer-products business that has a strong footprint on the supermarket shelves. It pays a solid dividend, and it's a great core holding suitable for dollar-cost-averaging. This is why one holds a P&G: to take advantage of the times when the stock may be down because of challenging times. You improve your cost basis, and go for a high effective dividend yield over time.

If you're trading P&G, you may want to be careful. For those not trading, I think P&G can still be counted on as being a relatively safe entity to hold. The company is a great generator of cash flow, and you can rest assured that management will be watching its costs and expenses carefully. Sometimes that's not enough, especially in these times of uncertainty, but patient players should remain just that... patient.

Disclosure: I don't own any company mentioned; positions can change at any time.

"We've followed Warren Buffett's advice to 'buy American'," says Mark Skousen; his Hedge Fund Trader eyes Johnson & Johnson (NYSE: JNJ) and FPL Group (NYSE: FPL).

"Johnson & Johnson as well as FPL Group are two strong positions in companies that have suffered a few 'hiccups' during this historic panic selling, but are likely to survive and prosper in the next year.

"First, Johnson & Johnson, the health care and pharmaceutical giant, beat expectations in its most recent earnings report. The company's earnings jumped 30% to $3.3 billion on revenues of $15.9 billion. It currently is selling for only 15 times forward earnings -- a bargain price.

"Second,, FPL Group -- known as Florida Power & Light -- is a large Florida utility company that is holding up well. It, too, is a solid company that now is on sale because of the financial crisis.

"Revenues are down slightly to $15 billion, and earnings dropped 40% during the past year. But Florida Power is still profitable, and at 10 times next year's earnings, it should continue to recover.

"We think it is wise at this time to limit our exposure to the markets, and to keep our powder dry by focusing strictly on a few well-financed utilities and consumer product firms.

"Overall, we consider both Johnson & Johnson and FPL Group to be solid companies selling at a substantial discount to their real value."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

You've got to love 3M (NYSE: MMM). The company, whose colleagues include Johnson & Johnson (NYSE: JNJ) and DuPont (NYSE: DD), reported earnings for the third quarter on Tuesday. The numbers appeared good to me.

3M's revenues increased over 6%. Operating income went up well over 8% (excluding special items). Operating income margins rose 60 basis points. The bottom line went up 10%, coming in at $1.42 per share on an adjusted basis. Analysts were looking for about $1.38 per share, so management certainly beat the experts on Wall Street. One of the great things about this Dow component is its ability to generate a decent stream of cash flow. For the nine-month period, 3M delivered $3.4 billion in operational cash flow. That represented a 25% increase. Capital expenditures remained about the same, so free cash flow also took a really superb hike. Free cash generated came in at $2.4 billion, a 42% increase.

For the year, 3M expects to earn at least $5.40 to $5.48 per share, excluding special adjustments. If 3M hits even the low end of the range, then the stock has to be considered cheap. The blue-chip company, which operates in many different areas, including health care and transportation, and which produces products as varied as adhesive tape and surgical masks, closed on Tuesday at about $60 per share. It's well off the 52-week high of $88.70 and it's not too near the 52-week low of around $50.

I like the yield and the valuation, but I'd like to wait for a bit of a pullback before taking a look at 3M. We're just not in a decidedly upward-trending market, and guidance could change (as it apparently did since the last time I covered 3M). Buying on pullbacks is always smart strategy.

Disclosure: I don't own any company mentioned; positions can change at any time.