Healthcare tends to be a recession-resistant sector because demand for its services is generally inelastic -- people need medical care regardless of what is happening with either the economy or the stock market. This makes healthcare companies potentially more stable during economic ups and downs compared to more cyclical industries.
Many established healthcare companies, particularly in the pharmaceuticals and medical device segments, have substantial profits and cash flows that continue to support dividend payments and growth over many decades. Here are two fantastic healthcare picks to consider if you are a dividend investor and have cash to put to work in the current stock market.
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1. AbbVie
AbbVie (ABBV +3.58%) has an inherited 53-year streak of consecutively increasing its dividend, dating back to its time as part of Abbott Laboratories. This long-term commitment to shareholder returns qualifies it as a Dividend King. In October, the company announced another dividend increase of 5.5%. The yield is about 3.3% right now. AbbVie's primary growth tailwinds are the exceptional performance of its next-generation immunology drugs Skyrizi and Rinvoq, and strong, double-digit growth in its neuroscience portfolio.
This momentum is successfully offsetting the significant decline in sales of its former top-seller Humira due to the recent introduction of biosimilar competition. Skyrizi and Rinvoq delivered incredible sales growth (47% and 35%, respectively) in the third quarter of 2025, and are gaining market share across multiple indications, including plaque psoriasis, arthritis, and inflammatory bowel diseases. Combined sales of the two drugs alone are on pace to exceed $25 billion for the full year 2025.
The neuroscience portfolio is a strong secondary growth engine, with sales from this segment up over 20% as of Q3 2025. This growth is fueled by strong uptake of the migraine drugs Ubrelvy and Qulipta, the depression treatment Vraylar, and Botox Therapeutic for migraines and other conditions. AbbVie's total net revenue in Q3 reached nearly $15.8 billion, up 9% year over year.
NYSE: ABBV
Key Data Points
The company's diluted earnings were down 38% year over year primarily because of higher in-process research and development charges related to recent acquisitions, including substantial one-time, non-cash charges of approximately $2.7 billion. AbbVie has been on an acquisition spree since early 2024, acquiring companies like ImmunoGen (key to its oncology segment) and Cerevel Therapeutics (which boosted its neuroscience assets) to diversify its portfolio and secure future long-term growth catalysts.
This particular $2.7 billion charge was most likely related to the recent $2.1 billion acquisition of Capstan Therapeutics and a $700 million licensing agreement with Ichnos Glenmark Innovation. Capstan Therapeutics is developing an investigational therapy that uses a method to genetically engineer a patient's own T cells to fight cancer inside the body. The acquisition strengthens AbbVie's immunology pipeline and allows it to explore a novel, off-the-shelf in vivo CAR-T approach that avoids the complex manufacturing and preconditioning challenges of traditional ex vivo CAR-T cell therapies. The licensing agreement with Ichnos Glenmark Innovation involves an exclusive license to a trispecific antibody for the treatment of blood cancers.
Despite the decline in Q3 generally accepted accounting principles (GAAP) earnings, AbbVie's adjusted earnings per share (EPS) of $1.86 actually beat Wall Street's expectations of $1.77. As a pharmaceutical company, AbbVie's business is relatively non-cyclical. Demand for its medications tends to hold up regardless of the broader economic conditions, and provides a steady stream of growth. Investors looking for dividends and stable share price appreciation might want to take a second look at AbbVie.
2. Johnson & Johnson
Johnson & Johnson (JNJ +0.29%) has increased its dividend for 63 consecutive years, an elite track record that demonstrates a profound commitment to returning value to shareholders through various economic cycles. The major healthcare company has evolved its business model through the years and now focuses exclusively on pharmaceuticals and medical technology (after the spin-off of its consumer health business into Kenvue in 2023).
Johnson & Johnson has a storied track record of generating significant free cash flow (it generated about $20 billion in free cash flow in 2024). The company's dividend payout ratio is manageable at around 50%, which also has proven to leverage ample room for future dividend increases and reinvestment into the business. The stock's yield is around 2.8% at the time of this writing.
The pharma giant also holds a rare AAA credit rating from S&P Global's ratings body. As of November 2025, Johnson & Johnson is one of only two U.S. companies in the S&P 500 (the other being Microsoft) to hold S&P's highest possible credit rating, which is a testament to its exceptional financial strength and very conservative financial policies.
NYSE: JNJ
Key Data Points
J&J is focusing on six priority areas for its long-term growth story: oncology, immunology, neuroscience, cardiovascular, surgery, and vision products. An upcoming spin-off of its orthopedics division will enable the business to further concentrate efforts on these higher-growth segments. The oncology segment continues to be a powerhouse that delivered nearly 20% operational sales growth in Q3 2025, while the cardiovascular segment in MedTech also recorded impressive figures (around 13%). J&J reported Q3 sales of about $24 billion, a 6.8% increase year over year, and diluted EPS of $2.12, up 91% from one year ago.
Darzalex for multiple myeloma remains a top-performing drug and was the company's first brand to exceed $3 billion in sales in a single quarter. Tremfya for psoriasis and inflammatory bowel diseases, Carvykti for multiple myeloma, Erleada for prostate cancer, and Spravato for treatment-resistant depression are also key growth products for the business.
Impella heart pumps and other electrophysiology products, like Varipulse, are significant growth drivers for the company's MedTech cardiovascular division. The rising prevalence of heart disease, advancements in minimally invasive procedures, and the increased use of these devices for complex conditions and high-risk interventions are all growth tailwinds for this business. While Johnson & Johnson is far from a high-growth stock, the profitability and resilience of its brands and its proven commitment to its dividend could make it a compelling play for long-term income investors.
