Don’t Take Every Legal Battle at Face Value

[Intelligent Income Daily]( Welcome to Intelligent Income Daily, the brand-new free daily newsletter from wealth and income expert Brad Thomas. Brad’s experience spans three decades of real estate and stock market booms and busts. Today, he and his team focus exclusively on the safest and most predictable ways to earn sustainable and growing income in any market condition. You can find all past issues [here](. And if you have any questions, please contact Brad and his team [here](mailto:memberservices@widemoatresearch.com). Don’t Take Every Legal Battle at Face Value By Brad Thomas, Editor, Intelligent Income Daily Lawyers are a necessary evil. They help make sure things go according to plan and if something bad happens, are financially incentivized to do their best to protect you. This day and age they are needed more than ever before in light of the stupidity and greed of many shady characters. In 2022 alone, some of the most ridiculousness lawsuits were filed. The most recent one that came to my attention was a lawsuit centered around Texas Pete hot sauce. [Can One Stock Double Your Money, During Crisis?]( Apparently, a man from California bought a $3 bottle of Texas Pete, and to his utter shock and disbelief found that the product was made in my neighboring state of North Carolina rather than Texas. The shock was so great that he is now suing the owners of Texas Pete, T.W. Garner Food Co., over their deceptive marketing. To one author’s point, I really hope he doesn’t go after the owners of the Milky Way candy bar next when he discovers they are made on planet earth. Here at the Intelligent Income Daily, we’re focused on finding the safest income investments on the market. But even the safest companies can find themselves caught up in lawsuits that could potentially bankrupt them. Today I want to tell you how one of the safest, highest quality companies – Johnson & Johnson (JNJ) – is dealing with a longstanding legal threat. You’ll see why this could have bankrupted the company and how lawyers turned things around so that shareholders no longer have to worry about the safety of their dividends. Recommended Link [Exclusive Sit-Down with the World’s #1 Market Oracle: “Prepare for the ELEVENTH HOUR”]( [image]( We believe Phillip J. Anderson is the world’s #1 market forecaster. He called it all: - The dot-com Crash - The Great Recession - The 10-year bull market that followed… And his record over the last three years is flawless – he called the crash in 2020 and the recovery, 2022’s down year… and just look at that chart above to see what he’s predicted over the last few months. Legacy Daily Cut editor Chris Lowe is going to sit down with this reclusive Australian in his first-ever appearance in U.S. media tomorrow, April 11th, at 10 a.m. ET… To ask him about his prediction for markets in 2023… a “unique period of panic,” Phil calls “The ELEVENTH HOUR.” [To secure your seat to the event, click here to be signed up instantly.]( -- A Costly Legal Headache This legal battle starts with one small substance known as talc. It’s the softest mineral, and very useful in a number of different industries. It’s used to make paper, paints, cosmetics, and ceramics. It’s even used in medicines and food. For example, table salt often contains a small amount of talc to prevent clumping. In its natural form, talc is often found near ores containing asbestos, which is linked to cancer. But, quality control regulations in place since the 1970s have required that talc used for food and cosmetic purposes must be refined and processed to eliminate asbestos. Talc is the main ingredient in baby powder, a product that Johnson & Johnson has made for decades. The International Agency for Research on Cancer classified talcum powder as a possible human carcinogen in 2006. But, according to the American Cancer Society, it is not clear if consumer products containing talcum powder increase cancer risk. A study by the National Institute of Environmental Health Sciences in 2020 found no strong evidence linking baby powder with cancer. And the FDA has not found asbestos in any of the talc-containing products it investigated. Still, that hasn’t stopped opportunistic individuals from suing Johnson & Johnson, claiming it knew its baby powder contained asbestos and was responsible for causing ovarian cancer in women that used it. A series of trials beginning in 2016 awarded tens of millions of dollars to people who claimed the company’s baby powder caused their cancers. Then a case in 2018 awarded 22 people $25 million each and fined Johnson & Johnson a headline-grabbing $4.1 billion. Though the company was later able to reduce the fine to $2.1 billion in an appeal, the damage was done. Now there were tens of thousands of people – some of whom didn’t even have cancer – filing lawsuits hoping to get a payout from the company. If each of them got tens of millions of dollars, the final bill could add up to hundreds of billions of dollars. Not to mention it would take many years of grueling court cases. So Johnson & Johnson’s lawyers turned to a somewhat shady – but legal – strategy known as the “Texas two-step.” The company created a subsidiary called LTL Management and put all the liabilities related to talcum powder in it. Then LTL Management filed for bankruptcy protection. By using this tactic, lawyers were trying to protect the company’s main business and force its opponents to the negotiating table. Last week, Johnson & Johnson offered to settle its talcum powder lawsuits for a total of $8.9 billion. The company claims that about 60,000 plaintiffs have agreed to the proposal, which should take care of the majority of outstanding cases. Though $8.9 billion is a large number, it represents about half a year’s worth of net income for Johnson & Johnson, and the money will be paid out over 25 years. That’s an acceptable amount to make this headache go away. Now the company can move on and focus on running its profitable business. We see no risk to the company’s dividend, which is at a safe 45% payout ratio. We’re Sticking With This Dividend Aristocrat Johnson & Johnson is one of the companies in our Intelligent Income Investor SWAN (sleep well at night) Portfolio. We like it because it has a sterling AAA credit rating, a defensive healthcare business, and increased its dividend 60 years in a row. Finally, with its talcum powder lawsuits about to be settled, a major overhanging threat will be resolved so shareholders can breathe a sigh of relief. At Wide Moat Research, we don’t get caught up in the ridiculous attempts of shady characters to discredit quality companies like Johnson & Johnson. Instead, we take advantage of the discounts these individuals provide us, to increase our overall wealth. If you would like to know the exact by-up-to price of Johnson & Johnson that we recommend as well as other picks in our Intelligent Income Investor portfolio, [click here](. This premium service provides trade alerts and special reports on the highest quality dividend-paying companies the market has to offer. Our focus is on finding safe and secure dividends to create a growing income stream that will passively support your lifestyle with stress-free investments. Let the lawyers and our analysts do the work for you, so you don’t have to worry about sorting out the schemers from valid long-term investments in your portfolio. Happy SWAN investing, Brad Thomas Editor, Intelligent Income Daily IN CASE YOU MISSED IT… [[DEMO] Penny or Dollar? (Not what you expect)]( Something odd is going on with our money. If you understand what’s going on, you could come out far ahead if you make the right moves. But if you don’t, you could be blindsided in the days ahead. According to Nomi Prins, PhD, this could be the most important story in the financial world in 2023… It has little to do with stocks, bonds, or cryptocurrencies… In fact, it all traces back to the humble copper penny. Knowing this secret could unlock the key to lining your pockets with cash in the months ahead. 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