Johnson & Johnson (JNJ -0.21%) and GlaxoSmithKline (GSK 0.71%) are two pharma stocks coveted by income investors for their top-notch dividends. Glaxo, for instance, sports one of the industry's most generous yields at 5.81%, and J&J, a Dividend Aristocrat, is certainly no slouch, either, with its annualized yield of 2.7%.

These two elite healthcare companies, however, are both going through a rough patch. Which company should investors place their faith in to keep delivering a solid source of passive income? Let's check out the strengths and weaknesses of each company to find an answer.

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J&J's pluses and minuses

J&J's top line has flatlined this year due to its struggling consumer healthcare and medical device units. While pharmaceutical sales have been keeping the company on an even keel the past few years, this business has also recently been hurt by the introduction of knockoff versions of its top-selling immunology medication, Remicade.

As a result, J&J's top line only rose by a meager 0.1% in the first quarter of 2019, compared with the same period a year ago. The company, though, was quick to point out that worldwide sales actually rose by 5.5% on an adjusted operational basis for the three-month period (excluding divestitures and acquisitions).

For the full year, Wall Street expects J&J's top line to dip slightly in 2019 by half a percent due to these various headwinds. On the plus side, the healthcare giant is forecast to return to form next year, with its top line projected to rise by a healthy 4.2% in 2020. Longer term, J&J appears to be on particularly solid ground due to its heavy investment in research and development (R&D). At present, the company has 10 potential oncology drugs in the works capable of generating blockbuster-level sales.

Despite J&J's down year in 2019, the company should still generate over $14 billion in cash flows from operating activities this year, which bodes well for its shareholder rewards program. J&J should thus have no problem rolling out yet another dividend hike around this time next year, despite its relatively high 66.6% payout ratio over the last 12 months. Annual dividend raises, after all, have been a tradition for the pharma titan for going on 57 long years at this point. Nothing in its recent quarterly filings indicate this rich tradition will come to an end anytime soon.

GlaxoSmithKline's pluses and minuses

Two years ago, Glaxo CEO Emma Walmsley rolled out a long-term plan of attack to get the company back on track. After a decade of Glaxo lagging behind the industry under the leadership of former CEO Andrew Witty, Walmsley was quick to shake up the healthcare giant by slashing R&D programs, cutting costs, and making deals to support the spinoff of the company's consumer healthcare unit. The overall result is that Glaxo should turn out to be a more efficient company squarely focused on biopharmaceutical products -- instead of a diffuse healthcare entity with fingers in too many pots, so to speak.

The problem, though, is that Glaxo might simply be too late to the oncology growth party -- a key area the company has identified as a pillar of its future value proposition. That said, the drugmaker does have a blockbuster candidate in development for multiple myeloma and its $5.1 billion acquisition of Tesaro does gives it an entry point into the underdeveloped PARP market. But there's no doubt that Glaxo has a lot of work to do to flesh out this fledgling unit. Unfortunately, the company's highly leveraged balance sheet may keep it from pursuing additional bolt-on acquisitions in oncology to speed up this process.

Glaxo's sky-high yield also looks unsustainable over the long term. The company has held out against lowering its dividend during this ongoing transformation, but the drugmaker's 110.6% payout ratio over the last year strongly suggests that a reduction may soon be a necessity.

Glaxo's top line is expected to take a big jump next year thanks to the stellar commercial launch of its shingles vaccine Shingrix. However, the company's free cash flows probably won't ramp up fast enough to comfortably cover this enormous payout to shareholders. Glaxo, in effect, will likely have to make a tough choice sometime next year between additional business development activities designed to accelerate this pivot to biopharmaceuticals and its overly generous shareholder rewards program.

Which stock is the better buy?

In this head-to-head matchup, J&J is the hands-down winner. J&J might be going through a trough year, but it has a considerably more robust clinical pipeline and a dramatically healthier balance sheet to boot. GlaxoSmithKline, on the other hand, is still a few years from being a finished product. Walmsley has done an admirable job of reshaping the company in her short two years as CEO, but there's clearly more changes coming down the pike. As such, it's next to impossible to gauge Glaxo's intrinsic value with any confidence right now.