For decades, Johnson & Johnson (JNJ 1.24%) stock was favored by investors seeking steady gains. Looking at its post-COVID-19 performance, though, steady gains aren't what investors received.
When the market closed on Tuesday, July 15, shares of Johnson & Johnson or J&J, were down 7.5% in the year to date and about 17% below the all-time high the stock set back in 2022. Recent stock price movements don't jibe with the company's performance. When reporting second-quarter results before the market opened on July 16, management raised its sales outlook for the year.
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J&J's stock price is down from its 2022 peak, but it's performed better than you might think by simply looking at its chart. In 2023, shareholders received new shares of Kenvue, which used to be the conglomerate's consumer health division. Plus, this April, it raised its dividend payout for the 63rd year in a row.
Let's take a closer look at J&J's performance through the first half of 2025 to see if it's still a good dividend stock to buy now.
Reasons to buy Johnson & Johnson stock now
The healthcare conglomerate's latest dividend increase of 4.8% raised the quarterly payout to $1.30 per share. At recent prices, that works out to a 3.3% yield.
Sales of Listerine and Q-tips were reliable, but they didn't grow very fast. Now that J&J is a two-segment business focused on drugs and medical technology, overall sales growth at a mid-to-high single-digit percentage over the long run seems likely.
Despite recently losing patent-protected market exclusivity for Stelara, a blockbuster treatment for psoriasis and Crohn's disease, J&J reported second-quarter pharmaceutical sales that rose by 4.9% year over year. Now that Stelara is responsible for less than 7% of total revenue, continued losses to biosimilar competition will be much easier to overcome with growing sales of newer products.
There are more than enough new products in J&J's product lineup to overcome Stelara losses and continue growing earnings. For example, the FDA approved Spravato for treatment-resistant depression last year. In the first half of 2025, sales of the drug bounded 48% higher year over year to an annualized $1.5 billion.
Caplyta, a treatment for schizophrenia and bipolar depression that J&J acquired in April, could surge in 2026. Earlier this month, J&J submitted an application that could make it a popular treatment for preventing relapses of schizophrenia. In a clinical trial supporting the application, treatment with Caplyta reduced the risk of relapse by 63% compared to the placebo group.
The intellectual property protecting sales of medical technology lasts a lot longer than drug patents. With a new robotic surgical system on the way, J&J could have a powerful growth driver that boosts profits for decades.
In April, surgeons completed the first cases in a clinical trial for the Ottava Robotic Surgical System. Competing with Intuitive Surgical won't be easy. With heaps of resources, J&J has a chance to gain a significant share of the lucrative surgical robotics space.
Even without any contribution from Ottava, second-quarter MedTech sales rose by 7.3% year over year. Aging populations in developed nations will need plenty of cardiovascular interventions and hip replacements in the decades ahead. As a leader in these niches, continued growth at the present pace is a reasonable expectation.
NYSE: JNJ
Key Data Points
Don't expect huge gains
With intellectual property that doesn't last long, pharmaceutical businesses are made of many pieces moving in opposite directions.
Stelara accounted for about 11.7% of total revenue in 2024, making it the biggest patent cliff the company has to deal with at the moment. Multiple myeloma treatment Darzalex is currently responsible for 14.9% of total revenue. The main patents protecting U.S. market exclusivity for Darzalex expire in 2029.
Stelara losses in the present and Darzalex losses several years from now mean we aren't likely to see overall sales growth at a double-digit percentage over the long run. That said, we can reasonably expect forward movement at a high-single-digit annual percentage. In the second quarter alone, J&J reported successful clinical trial results for over a dozen compounds that could support new drug approvals or expansions of addressable patient populations for existing treatments.
If you're interested in a dividend payout that grows steadily, this is the stock for you. If rapid principle appreciation is what you're after, though, it's probably best to keep looking.
