Dividend Kings Face-Off: Johnson & Johnson (JNJ) Vs. Procter & Gamble (PG)
If you are someone who thinks investments should generate regular income, it is important to watch out for dividend stocks. While there are hundreds of dividend-paying companies, you need to look beyond the current yield and focus on those that have a steady dividend growth. This will ensure that your income is steadily increasing while […] The post Dividend Kings Face-Off: Johnson & Johnson (JNJ) Vs. Procter & Gamble (PG) appeared first on 24/7 Wall St..
If you are someone who thinks investments should generate regular income, it is important to watch out for dividend stocks. While there are hundreds of dividend-paying companies, you need to look beyond the current yield and focus on those that have a steady dividend growth. This will ensure that your income is steadily increasing while your stocks enjoy capital appreciation.
Two dividend aristocrats– Johnson & Johnson (NYSE: JNJ) and Procter & Gamble (NYSE:PG) have always believed in rewarding shareholders. Both these companies have increased dividends for over 50 years and this speaks a lot about their commitment towards dividend distribution. But if you had to make a choice between the two, here’s what you need to consider.
Key Points
-
Procter and Gamble and Johnson and Johnson are both solid businesses. It isn’t easy choosing between two Dividend Aristocrats.
-
However, one of these two companies has a higher yield and is less impacted by tariffs.
-
Most Americans don’t realize how shockingly good personal loans are today. See for yourself, with 6.4% rates and no hit on your credit score there is nothing to loose, you can get started today.
- Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor)
Johnson & Johnson
Healthcare giant Johnson & Johnson has a global presence and it has become a household name today. The stock is exchanging hands for $154 and is up 7.58% year-to-date. Its 52-week high is $169 and while it hasn’t shown much capital appreciation over the years, its dividend payouts have remained strong.
It recently announced a 4.8% rise to the dividend and enjoys a streak of 63 years. JNJ stock has a dividend yield of 3.36% which makes it a compelling buy for passive income investors.
The company has a solid business and has started 2025 on a strong note. In the recently announced first-quarter results, its revenue stood at $21.9 billion, up 2.4% year-over-year while the EPS came in at $4.54. It has a solid product pipeline and the management has increased the operational sales guidance for the year.
Its pharmaceutical segment is known for cancer and immunology drugs which account for a large segment of total sales. The company is also growing its MedTech segment which has become a crucial part of its revenue growth. JNJ saw a 4.2% jump in the Innovative medicine segment and a 4.1% jump in MedTech.
It faces the talc powder lawsuit which has been going on for a long time now. While there is uncertainty regarding the same, I do believe that the settlement will not impair future dividends. Johnson & Johnson is a rock-solid name in the industry and its dividends are stable and reliable.
Procter & Gamble
Procter & Gamble has been paying dividends since 1890 and no company can beat its streak. The company has rewarded shareholders since the year it was incorporated and it has a streak of raising dividends consistently for 69 years. The consumer goods company has a massive portfolio and a global presence that has only grown with time.
Exchanging hands for $160, PG stock is down 3% year-to-date and 1% in 12 months. The stock has a dividend yield of 2.63% and the management recently raised the dividend by 5%. It owns more than 60 brands which are used across households regularly.
In the recently announced results, the company missed revenue expectations and saw a 2.1% drop in sales to $19.78 billion. The EPS of $1.54 was higher than expectations. Its organic revenue was flat year-over-year and the management has lowered the guidance.
Over the past two quarters, the company has seen flat sales volume and this could be due to lower consumer spending. The tariffs could have an impact on sales and lower profits in the long term. However, it owns a diverse business model and essential products that will always be required by households.
There could be price hikes in the quarter to offset the rising costs. It enjoys monopoly and pricing power in the industry which allows it to enjoy stability despite market ups and downs.
The verdict
While Procter and Gamble and Johnson & Johnson both are ideal choices for passive income investors, I’d recommend Johnson & Johnson in the current market environment. It has a higher yield and is less vulnerable to the impact of tariffs. Healthcare is a necessity and even during periods of low consumer spending, JNJ will remain a steady business. The long-term picture for Johnson & Johnson looks attractive while there could be some uncertainties around Procter & Gamble.
Even in tough times, there is always going to be demand for healthcare products. People can cut down their spending on household items but they will not compromise on healthcare products. I think the stock is reasonably valued and is the one to buy and hold for the decade.
The post Dividend Kings Face-Off: Johnson & Johnson (JNJ) Vs. Procter & Gamble (PG) appeared first on 24/7 Wall St..