Key Points
Few companies have a longer track record of uninterrupted dividend growth.
This streak is likely to be prolonged well into the foreseeable future.
While still an income stock, Johnson & Johnson is also being priced somewhat like a growth stock.
It's certainly not the market's most exciting stock, and not its highest-yielding one either. If you want reliable dividend growth, though, you'd be hard-pressed to find a better option than drugmaker Johnson & Johnson (NYSE: JNJ).
In fact, after 64 straight years of annual dividend increases -- and counting -- only eight other Dividend Kings (companies that have raised their dividends for at least 50 consecutive years) can boast a longer streak of yearly dividend growth.
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This track record's likely to be extended indefinitely, too. Although drugs come and go with their patent protections and expirations, there are always new ways to reload a pharmaceutical company's pipeline and portfolio. Johnson & Johnson, for instance, is aiming for annual oncology drug sales of $50 billion by 2030, making it the biggest name in the cancer treatment business.
In other words, there's enough potential on the horizon for income-minded investors to consider a stake in J&J.
To this end, how much dividend income would a $10,000 position in the pharmaceutical powerhouse produce? That would mean around 39 shares at current prices. With a forward-looking dividend yield currently around 2.1%, this holding would generate close to $210 per year.
That's not a lot; you could certainly find higher-yielding dividend stocks to buy. It's not like Johnson & Johnson's recent dividend growth has been explosive either. It has only improved by 67% over the course of the past decade, for an average of about 5.3% per year. Not bad, but hardly thrilling.
Just bear in mind that J&J has become much more than a mere income investment since 2024, when it first made oncology a priority with a string of acquisitions like Shockwave Medical, Intra-Cellular Therapies, Halda Therapeutics, and, most recently, Firefly Bio. All of this dealmaking makes it a bit more of a growth investment. It's certainly been acting like one, gaining nearly 80% since the end of 2024.
James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.