Johnson & Johnson (JNJ +0.85%) is among the dividend elite. The healthcare behemoth has raised its dividend for 63 years in a row. That more than qualifies it as a Dividend King, a company with 50 or more consecutive years of annual dividend increases.
The healthcare giant currently pays a 2.4% dividend yield, which is double the S&P 500's 1.2% yield. Johnson & Johnson's dividend is as healthy as ever, which was abundantly clear in its recently reported fourth-quarter financial results.
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The epitome of financial health
Johnson & Johnson rang up $94.2 billion in sales last year, a 6% increase from the prior year. The healthcare giant posted $26.2 billion in adjusted net earnings, a more than 8% increase, and roughly $19.7 billion in free cash flow, a little less than the prior year.
That was more than enough free cash flow to cover the company's dividend payments, which totaled $12.4 billion last year. That enabled it to retain cash to maintain its healthy balance sheet. Johnson & Johnson ended the year with $20 billion in cash and marketable securities against $48 billion in debt. Its roughly $28 billion in net debt is a paltry sum, considering its market cap is more than $520 billion. These healthy numbers support the company's pristine AAA bond ratings.
NYSE: JNJ
Key Data Points
The healthy growth should continue
Johnson & Johnson expects to continue growing in 2026 and beyond. The company expects its sales will increase by more than 6% to top $100 billion this year. Meanwhile, it anticipates delivering adjusted earnings-per-share growth of 6% to 8%. That positions it to continue producing robust free cash flow. The company expects to benefit from the growth of existing and new innovative medicines and medical technologies.
The company's heavy investments in research and development ($14.7 billion in R&D spending last year) enable it to continue delivering new medical technologies and innovative medicines. Additionally, Johnson & Johnson should continue to benefit from its strategy of using its strong balance sheet to make acquisitions that enhance its growth. Last April, the company closed its landmark $14.6 billion acquisition of Intra-Cellular Therapies to solidify its leadership in neuroscience. Meanwhile, in December, it closed its $3.1 billion deal to acquire Halda Therapies and revolutionize cancer treatment. These and future acquisitions will further enhance its ability to deliver new healthcare solutions and grow its financial results.
A very healthy dividend stock
Johnson & Johnson's fourth-quarter financial results made it abundantly clear that its dividend is as healthy as ever. The company produced robust cash flow last year and has a fortress balance sheet. Meanwhile, it has healthy growth prospects for 2026 and beyond. As a result, investors can bank on this Dividend King continuing to deliver a steadily rising payout in the future.
