Looking for a Dividend Stock That Can Weather a Downturn? Start With Johnson & Johnson.
Key Points
Healthcare stocks are a great place to find recession-resistant dividend stocks, including Dividend King Johnson & Johnson.
With 64 consecutive years of dividend growth under its belt, not to mention a strong focus on growth prioritization, "J&J" is well positioned to deliver solid total returns in the years ahead.
While factors like payout growth and yield may not sound too exciting, the company's moderate metrics serve as an example of "slow and steady" leading to long-term investing success.
- 10 stocks we like better than Johnson & Johnson ›
When considering defensive dividend stocks, the healthcare sector is a great place to look. After all, even during a recession, people need medicine and surgery, and there's always a need for medical breakthroughs.
However, among stocks in the recession-resistant healthcare sector, one in particular stands out as a blue chip dividend to buy and hold for the long run: Johnson & Johnson (NYSE: JNJ).
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
A growth-focused stalwart among Dividend Kings
For 64 consecutive years, Johnson & Johnson has raised its quarterly cash dividend. This long track record of dividend growth places it in the Dividend Kings category, or stocks with at least 50 years of consecutive annual dividend growth.
With this strong dedication to growing the dividend, it's no surprise that Johnson & Johnson is just as diligent on operational growth. By jettisoning slower-growing businesses and pivoting toward faster-growing segments of healthcare, such as hematology, the company can sustain the revenue and earnings growth necessary to both implement dividend increases and maintain the stock's valuation of around 21 times forward earnings.
Well positioned to generate solid total returns
When it comes to total returns, or the combination of price appreciation and cash returns from dividends, the ingredients are in place with Johnson & Johnson. Beyond the healthcare industry's recession-resistant dynamics, there are cold, hard numbers that support dividend sustainability.
For one, based on analyst estimates calling for 2026 earnings of $11.08 per shareand forward annual dividends of $5.36 per share, shares trade at a forward payout ratio of under 50%, a level most consider sustainable. Second, J&J's historic dividend growth, plus the size of the dividend itself, has been fairly modest. The stock has a 2.1% forward yield, with annual payout growth in the mid-single-digits .
While perhaps not the most exciting combination, J&J's modest yield, long track record of dividend growth, and focus on overall operational growth all point to solid total returns over a long time frame.
Should you buy stock in Johnson & Johnson right now?
Before you buy stock in Johnson & Johnson, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Johnson & Johnson wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $361,650!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,437,517!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 5, 2026.
Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
Recommended Articles
