Johnson & Johnson (JNJ -0.65%) has one of the best dividend track records in the country. The healthcare giant has increased its dividend every year for more than six decades. That puts it in an elite group of dividend stocks.
Here's a closer look at the company's dividend payment, which is why many people invest in Johnson & Johnson.
Putting Johnson & Johnson's dividend under the microscope
Johnson & Johnson declared its latest dividend payment in mid-April. The healthcare behemoth raised its quarterly payment to $1.24 per share ($4.96 annualized), a 4.2% increase from the prior payout. The company will pay its next dividend on June 4, 2024 to those who own the stock by market close on May 21, 2024.
Johnson & Johnson's dividend yields 3.3% at its recent stock price, which is more than double the S&P 500's yield of 1.4%. At that rate, every $1,000 invested into Johnson & Johnson stock would produce about $33 of annual dividend income, compared to around $14 for a similar investment in an S&P 500 index fund.
With its latest increase, Johnson & Johnson has now raised its dividend for 62 years in a row, making it a Dividend King. It has delivered very consistent dividend growth over the past decade, typically increasing the per-share payment by a mid-single-digit annual rate:
JNJ Dividend data by YCharts.
Investors can sleep well knowing Johnson & Johnson can easily afford its dividend. The company generated about $18 billion in free cash flow in 2023, easily covering the $11.8 billion it paid in dividends. It also has a fortress-like balance sheet, with $26 billion in cash at the end of the first quarter and only $7 billion of net debt.
Johnson & Johnson is a very healthy dividend stock
Johnson & Johnson is a terrific dividend stock, and the company has a stellar record of increasing its dividend. It also offers a higher yield and backs its payout with a healthy financial profile. These factors make it a rock-solid dividend stock to buy and hold long term.
