Johnson & Johnson Has Dividend Royalty Status. Does That Make It a Buy?

Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) raised its quarterly dividend 3.1% to $1.34 per share this year, marking its 64th consecutive year of dividend growth. The quarterly rate rose from $1.13 to $1.19 in 2023, then $1.24, $1.30 and $1.34. At $253.88 the stock yields just 2.05%.

Growth Is Outrunning the Stelara Cliff

Biosimilar competition cut Stelara sales by 55.7% in the second quarter. Worldwide sales reached $25.3 billion, with J&J growing double digits excluding Stelara. Tremfya, set to replace it, brought in $2 billion, up 71%. Darzalex sales passed $4 billion, up 17.6%.

“We are not dependent on one or two products. We have a broad, durable portfolio that has 28 platforms, each generating more than $1 billion in annual revenue.”

AbbVie (NYSE:ABBV) is replacing Humira similarly. Its Skyrizi grew 24.4% to $5.505 billion, while Humira fell 35.9%. J&J’s replacement franchise is growing faster and includes Icotyde, an oral psoriasis drug that collected more than 18,000 prescriptions in a launch ahead of projections.

Pfizer (NYSE:PFE) shows what happens when the replacement pipeline falls behind. It yields 6.25% but guides 2026 revenue to $59.5 billion to $62.5 billion with roughly $1.5 billion in generic and biosimilar pressures. That high yield pays investors for a flat top line.

MedTech Is Where the Weakness Shows

Since the consumer-health split, J&J reports two divisions. Innovative Medicine posted $16.4 billion in sales, and MedTech posted $8.9 billion with only 3.6% operational growth. Abiomed fell 2%, and inventory issues in China cut electrophysiology growth by about 400 basis points. Shockwave grew 14.7%. Management remains confident about Abiomed’s heart pump:

“We remain confident in the long-term potential for Impella.”

The company also plans to spin off DePuy Synthes, its orthopaedics business, by mid-2027. That will leave a smaller device unit weighted more toward faster-growing products.

Litigation Costs Are Now Visible

In July, J&J agreed to a talc settlement that could resolve tens of thousands of lawsuits. Litigation charges totaled $854 million in the fourth quarter of 2025 and $330 million in the first quarter of 2026. Second-quarter net other expense reached $331 million. In August, Reuters reported that three scientists defeated J&J’s defamation suit over talc research, with J&J saying it would appeal.

Valuation Has Reset After the Pullback

The stock fell 7.76% over the past month after a one-year gain of 37.61%. It trades at a forward P/E of 21, with the analyst target at $279.50. Analysts rate it 5 strong buys and 11 buys against one sell. Management expects full-year free cash flow to approach $21 billion and raised adjusted operational EPS guidance to $11.50 to $11.65. CFO Joe Wolk repeated the payout commitment:

“We also remain committed to returning capital directly to shareholders, primarily through our dividend.”

Verdict: The business fundamentals make J&J worth a closer look at today’s price. Oncology and immunology growth offset the Stelara decline, free cash flow guidance supports the dividend, and litigation risk now has a number attached. MedTech is the weak link. Watch Abiomed’s recovery and the Enterprise Business Review on December 8, 2026.

Contact [email protected] for any questions or corrections.