The $100 Billion Pivot: Why Johnson & Johnson Is My Top Dividend King to Buy in 2026

Investors are increasingly worried about a coming recession or a market downturn, or both. The fears are understandable given recent geopolitical and macroeconomic developments, as well as the fact that the Nasdaq Composite recently dipped below correction territory. In this environment, it helps to invest in steady dividend payers, as they often have strong businesses that can withstand severe economic challenges. It might be particularly useful to turn to Dividend Kings, a group of companies that have raised their payouts for at least 50 years straight. Let's look into a Dividend King that is among my favorites to buy right now: Johnson & Johnson (NYSE: JNJ). Here's more on this healthcare leader.

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Achieving a rare feat

Johnson & Johnson has encountered its share of troubles in recent years. Let's briefly go through the list and name some of them. The company is still dealing with thousands of lawsuits from plaintiffs who allege that its talc-based products gave them cancer. And worse, the claims are that the healthcare giant knew of the risks and did nothing to remedy the situation. Johnson & Johnson has also faced patent cliffs. Just last year, it lost patent exclusivity for Stelara, an immunosuppressant, in the U.S, after the therapy had suffered the same fate in Europe in 2024.

Stelara hit peak sales of $10.9 billion in 2023, which accounted for almost 13% of the company's top-line that year -- that's a meaningful amount. The loss of patent exclusivity for a growth driver of this caliber can be a serious challenge for any drugmaker. Then there is the fact that Johnson & Johnson is facing government-imposed drug price negotiations in the U.S. Several of its therapies have been targeted. Johnson & Johnson will generate lower sales from those products as a result.

Even with these headwinds, Johnson & Johnson is performing well. Last year, the company's net sales grew 6% year over year to $94.2 billion, while its adjusted earnings per share rose 8.1% to $10.79. Johnson & Johnson is projecting that its revenue will climb to about $100.5 billion at the midpoint in 2026, which would represent a year over year increase of 6.7%. Notably, this will mark only the second time a biopharma company has achieved $100 billion in annual revenue. That would be impressive even if Johnson & Johnson weren't dealing with all those challenges.

The dividend is safe

Even if there is a recession on the way, Johnson & Johnson's business should be fine. Here are three reasons why. First, demand for healthcare products, especially lifesaving medicines (as opposed to, say, aesthetic procedures), doesn't stop or even slow down significantly during economic downturns. Second, Johnson & Johnson's business is one of the most diversified that investors can find in the sector. The company's pharmaceutical unit spans many therapeutic areas, including immunology, oncology, infectious diseases, and neuroscience.

It's partly thanks to the company's deep lineup that it can get around major patent cliffs relatively fine. And Johnson & Johnson also boasts a strong medtech business, marketing products across multiple niches. Third, Johnson & Johnson has a robust financial position. One of the best pieces of evidence for this is the company's AAA rating -- the highest available -- from S&P Global. Johnson & Johnson is highly unlikely to fail to meet its obligations.

Even losing some of its patent lawsuits would not be a death blow for the healthcare leader. That's why several judges have rejected its attempts to pin these lawsuits on a subsidiary for which it would then file for bankruptcy. So, Johnson & Johnson is a great stock to buy in these troubled, volatile times. The stock may help anchor your portfolio while providing regular payouts -- Johnson & Johnson has increased its dividends for 63 consecutive years. And over the long run, Johnson & Johnson could deliver excellent returns, especially for investors who reinvest dividends.

Prosper Junior Bakiny has positions in Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.