I Think Johnson & Johnson Is the Best Dividend Stock to Buy Right Now

There are plenty of excellent dividend stocks, but right now, Johnson & Johnson (JNJ -0.99%) stands out. The healthcare leader has a rock-solid business, and recent developments have made the stock even more attractive. Here’s more on what makes Johnson & Johnson such an attractive dividend stock.

What I look for in a dividend stock

Every investor has different goals, levels of risk tolerance, and starting capital. So they won’t all gravitate toward the same companies. Still, there is significant overlap in the qualities investors look for in dividend stocks. For me, one of the most important criteria is the underlying business’s financial health. Any other factor matters little if the corporation faces severe challenges that it is unlikely to overcome. That often leads to dividend cuts, or worse, the company may even stop paying dividends for a while. Another important thing I look for is a corporation’s dividend track record.

Image source: The Motley Fool.

Having consistently paid and raised dividends for a long time is no guarantee that a company will continue doing so. But it tells us something about management’s capital allocation priorities. It is also a proxy for the company’s ability to navigate challenging economic conditions while maintaining its dividend program. Two other things I look at are the company’s dividend yield (one that’s too low or too high can be a problem) and its payout ratio, which can indicate whether a company has enough financial flexibility to continue raising its dividend. It’s critical for me to consider all these factors (and others) together. They are more useful as a whole rather than as isolated metrics.

How Johnson & Johnson fares

Johnson & Johnson has a high score in every single one of those categories. Let’s start with the most important: The company’s underlying business. Johnson & Johnson has one of the more diversified healthcare operations I have seen anywhere on the market. The company’s pharmaceutical segment is already quite vast, with medicines across oncology, immunology, infectious diseases, neuroscience, and more. But Johnson & Johnson also has a fairly large, diversified medical device segment. So, even when it encounters troubles in some parts of the business, the rest can pick up the slack.

Johnson & Johnson is demonstrating that right now. Last year, it lost patent exclusivity for Stelara, an immunosuppressant, in the U.S. (Stelara’s patent cliff in Europe came in 2024). This wasn’t an insignificant loss. In 2024, Stelara made up almost 12% of the company’s net sales. However, the healthcare leader has expertly navigated this patent cliff. Johnson & Johnson expects $100.6 billion in revenue for the full fiscal year 2026 (at the midpoint), representing a year-over-year increase of 6.8%.

Today’s Change

(-0.99%) $-2.71

Current Price

$270.43

Key Data Points

Market Cap

$658BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$269.55 – $272.90

52wk Range

$173.33 – $276.47

Volume

3.5M

Avg Vol

7.9M

Gross Margin

68.03%

Dividend Yield

2.41%