Johnson & Johnson Raised Its Dividend Every Year. Why Did It Trail the S&P 500?

Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) spent the past decade rebuilding itself and raised its dividend every year. Say you put $1,000 into the stock 10 years ago and reinvested every payout. You would have $2,957.10 today, and about $703 of that came from dividends.

From Baby Powder to a Pharma and MedTech Powerhouse

A decade ago, J&J was a conglomerate with three divisions. In August 2023, it spun off consumer health as Kenvue (NYSE:KVUE), leaving two divisions: Innovative Medicine and MedTech. Then it went shopping. It bought Abiomed in 2022, Shockwave Medical in 2024, and Intra-Cellular Therapies in April 2025. It also plans to spin off its orthopedics business.

Talc lawsuits hung over all of it. In the third quarter of 2026, charges of about $7 billion for a proposed talc settlement and two deals cut reported EPS to $0.09. Adjusted EPS was $2.59.

Your $1,000 Nearly Tripled, With Dividends Doing Heavy Lifting

1-Year Return

• Initial Investment: $1,000
• Current Value: $1,349.40 (price only: $1,319.69)
• Total Return: 34.94%
• S&P 500 (same period): $1,145.30 (14.53%)

5-Year Return

• Initial Investment: $1,000
• Current Value: $1,798.60 (price only: $1,564.57)
• Total Return: 79.86%
• Annualized Return: 12.46%
• S&P 500 (same period): $1,695.00 (69.5%)

10-Year Return

• Initial Investment: $1,000
• Current Value: $2,957.10 (price only: $2,253.61)
• Total Return: 195.71%
• Annualized Return: 11.45%
• S&P 500 (same period): $3,593.10 (259.31%)

The S&P 500 figures leave out dividends, so the market’s real 10-year lead is bigger than shown. Over five years, dividends made the difference. On price alone, J&J returned 56.46% and trailed the index. Holding on also took patience. The stock fell 23.63%, from $186.01 in April 2022 to $142.06 in January 2025. During that slump, reinvested dividends bought shares cheaply, and the past year’s rally paid that off.

Growth Engines vs. the Talc Bill: What Decides the Next Decade

The case for Johnson & Johnson rests on new drugs continuing to offset STELARA’s decline. It struggles if lawsuit and deal costs start crowding out the dividend.

Bull case: Oncology sales grew about 17% last quarter, and TREMFYA rose 68.2%. The company expects $21 billion in free cash flow this year. CEO Joaquin Duato says there is “a clear path to double-digit growth by the end of the decade.” J&J reports 64 straight years of dividend increases. The payment history we checked supports that: the quarterly payout rose every year, from $0.18 in 2002 to $1.34 today.

Bear case: The biggest risk to the dividend is cash. Net debt is about $28 billion. Two recent deals, Firefly Bio and the Cell BioMedicines collaboration, are expected to cut 2027 adjusted EPS by $1.36. Talc settlement payments come on top of that. If they eat into free cash flow, dividend increases could shrink to small amounts.

The record favors patient investors who reinvest their dividends. With shares up 25.52% this year, the easy gains may already be behind it. I’d still expect dividends to keep doing much of the work.

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