If you own Johnson & Johnson (NYSE:JNJ) stock, there's a really good chance that you do so because of its dividend. The healthcare giant is a longtime favorite for income investors, in large part due to its sterling track record of 56 consecutive years of dividend increases.

But if you really prioritize dividend payments, Johnson & Johnson isn't the best choice. It's not even the top pick in the healthcare arena. When it comes to dividends, I think investors should look to AbbVie (NYSE:ABBV) and Pfizer (NYSE:PFE) instead of J&J.

Man holding hand up to the word "DIVIDENDS"

Image source: Getty Images.

A lot to offer

AbbVie is a rarity in that it has something to offer to nearly every kind of investor. The big pharma company's dividend yield of 3.86% should be enticing to income investors -- and definitely more attractive than Johnson & Johnson's 2.94% yield. AbbVie also has a long track record of dividend increases. Over the last five years, the company has hiked its dividend payout by an impressive 140%. J&J increased its dividend by 36% during the period.

Value investors should like AbbVie's low forward earnings multiple of 11. By comparison, Johnson & Johnson stock currently trades at more than 14 times expected earnings. That's not bad at all, but it's still quite higher than AbbVie's forward-looking valuation.

AbbVie stock should also be appealing to growth-seeking investors. Wall Street analysts project that AbbVie will increase its earnings by nearly 17% annually over the next five years -- more than double the expected earnings growth for Johnson & Johnson.

What's especially notable about AbbVie's growth potential is that the company should enjoy strong growth even with its top-selling drug, Humira, facing competition from biosimilars in Europe beginning later this year. Despite these headwinds, though, market research firm EvaluatePharma thinks that Humira will remain the No. 1 best-selling drug in the world in 2024.

AbbVie's growth should come from both current products and its pipeline. Sales for enormously successful cancer drug Imbruvica (which AbbVie co-markets with J&J) are expected to keep rising. Another cancer drug, Venclexta, is poised for rapid sales growth. AbbVie's hepatitis C drug Mavyret is already a big winner in its first year on the market. Pipeline candidates including immunology drugs upadacitinib and risankizumab are expected to be blockbusters.

This growth is also important for dividend investors. AbbVie currently uses around 66% of its earnings to fund the dividend. Sustained earnings growth should enable the company to keep on increasing its dividend payout for years to come. 

Turning the corner

Pfizer's dividend yield of 3.74% isn't too far behind AbbVie's. It's also well ahead of Johnson & Johnson's yield. And while Pfizer's dividend increases of 42% over the last five years aren't as impressive as AbbVie's, the big drugmaker still beats J&J on that front.

What about valuation? Pfizer stock trades at under 12 times expected earnings. That's a little more expensive than AbbVie, but it's well below J&J's forward earnings multiple.

Another reason for investors to like Pfizer is that the company appears to be turning a corner. Pfizer's growth has been hampered in recent years by declining sales for its older products that have lost exclusivity. In addition, product shortages due to manufacturing issues have hurt revenue for the sterile injectables business that Pfizer gained with its 2015 Hospira acquisition.

However, Pfizer expects the negative impact of declining sales of its older drugs will decrease over the next few years. The company also is making progress in resolving the issues that have plagued its sterile injectables business. With these two major challenges becoming less significant, Pfizer's growth should pick up steam.

Several current drugs should be key to the company's success: anticoagulant Eliquis, breast cancer drug Ibrance, autoimmune disease drug Xeljanz, and new diabetes drug Steglatro along with its combination products Steglujan and Segluromet. Pfizer's pipeline includes plenty of solid candidates, with breast cancer drug talazoparib and pain drug tanezumab notably standing out. It wouldn't be surprising for Pfizer to make strategic acquisitions that pay off, especially to strengthen its position in the potentially lucrative nonalcoholic steatohepatitis (NASH) market.

In defense of J&J

It might sound like I'm beating up on Johnson & Johnson. That's not my intent. I actually like the company and like the stock. 

One advantage that J&J has is its breadth of exposure across the healthcare spectrum. The company is a top drugmaker, but it's also a major medical device maker and a leader in consumer healthcare products. These other areas can hold back J&J's growth somewhat, but they also provide a stability that makes Johnson & Johnson less risky than most other stocks.

If you're looking for a steady dividend stock, you could do much worse than buying Johnson & Johnson. But you can also do better, in my opinion, by buying AbbVie or Pfizer.