3 Legacy Health Care Dividend Stocks That Never Go Out of Style
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Retirees who want income that keeps coming through recessions, rate swings and market scares often start with health care. People need heart devices, diagnostic tests and cancer drugs in every economy, and an aging population adds to that demand every year. Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction), Abbott Laboratories (NYSE:ABT) and Medtronic (NYSE:MDT) turn that steady demand into dividends that rise year after year. The longest streak of the three belongs to Johnson & Johnson, whose latest raise marked its 64th consecutive year of dividend increases.
Johnson & Johnson Pairs a Top Credit Rating With 64 Years of Raises
Johnson & Johnson was founded in 1886 and sits in the Dow Jones Industrial Average. Today it runs two engines: Innovative Medicine, led by cancer drugs such as DARZALEX, and MedTech. Management says the company is on track to top $100 billion in annual revenue for the first time in its 140-year history.
At a share price of $278.36, the stock yields 1.91% on a trailing dividend of $5.28 per share. The next quarterly check of $1.34 per share has already been declared.
Dividend safety: Trailing GAAP EPS of $6.59 looks thin next to the payout. That figure is distorted by one-time charges. In the third quarter alone, talc litigation and two deals added up to about $7 billion in charges. Management guides to adjusted EPS of $11.05 to $11.15, so the dividend uses about 47.6% of earnings at the midpoint. Cash coverage is stronger still. Full-year free cash flow guidance of $21 billion compares with a dividend bill of about $12.7 billion. The balance sheet held about $17 billion of cash and marketable securities against about $45 billion of debt, and the company carries a AAA credit rating, one of only two U.S.-based companies with that distinction.
Track record: The board raised the quarterly payout from $1.30 to $1.34, a 3.1% increase. The dividend history shows the same steady climb, from $1.19 to $1.24 in 2024 and $1.24 to $1.30 in 2025.
The bull case: New drugs are more than replacing older ones. Innovative Medicine sales rose 7.9% to $16.8 billion last quarter, with Tremfya up 68.2% and DARZALEX up 15.6%. Cancer, immunology and heart disease all become more common as people age. The chief financial officer listed the dividend among management’s top priorities: "Our disciplined approach to capital allocation is centered on prioritizing investments that support key commercial launches, accelerate future innovation, increase our annual dividend, and strengthen our pipeline." Shares are up 36.67% year to date and trade at 23x forward earnings.
The risk: Litigation keeps coming back. The proposed ovarian talc resolution of $5.5 billion cut third-quarter GAAP earnings to $210 million. More legal surprises could drain cash that would otherwise fund future raises.
Abbott Laboratories Keeps a Dividend Aristocrat Streak Rolling
Abbott was founded by Chicago physician Wallace Calvin Abbott in 1888. It spun off its research drug business as AbbVie (NYSE:ABBV) in 2013. What remains sells medical devices such as FreeStyle Libre glucose monitors, diagnostics (now including Cologuard after the $21 billion Exact Sciences deal), branded generic medicines and nutrition products.
At $109.98 a share, Abbott yields 2.28% on an annual dividend of $2.52, paid as $0.63 each quarter.
Dividend safety: Trailing GAAP EPS of $2.68 is weighed down by Exact Sciences acquisition costs. Adjusted results show the real coverage. Third-quarter adjusted EPS of $1.42 means the quarterly dividend used about 44.4% of earnings. Abbott returned $2.1 billion to shareholders through dividends and buybacks in the second quarter. Chief executive Robert Ford described the balance sheet plainly: "Our balance sheet is in very good, great shape. We’ve got a lot of flexibility." He added that the last big round of debt paydown from the St. Jude and Alere acquisitions happens this year, with "very few debt payments in the couple of years following that."
Track record: Abbott is an S&P 500 Dividend Aristocrat with 54 consecutive years of dividend increases, and the second quarter marked its 410th consecutive quarterly dividend. The quarterly payment climbed from $0.55 in 2024 to $0.59 in 2025 and $0.63 in 2026.
The bull case: Ford ties Abbott’s growth to an aging population, more chronic disease, earlier diagnosis and more personalized treatment. Third-quarter sales grew 7% and EPS grew 9%, and a Libre Duo launch in the U.S. is next. On the payout, Ford was direct: "We’ll grow the dividend next year, right?" Shares are down 10.06% year to date and trade at 19x forward earnings.
The risk: The planned nutrition spinoff will change how the income arrives. Management expects both companies to pay dividends that, "when combined, will equal Abbott’s dividend at the time of the separation." That means the check from Abbott alone will shrink, and shareholders will need to hold the new company too to keep the same income.
Medtronic Offers the Highest Yield Here and the Cheapest Forward Multiple
Medtronic got its start in 1949, when Earl Bakken, a graduate student in electrical engineering, began repairing medical electronics out of a garage. Its legal home is now in Ireland, its operating headquarters is in Fridley, Minnesota, and its stock trades on the NYSE. The portfolio covers cardiovascular, neuroscience, medical surgical and diabetes devices.
At $100.29, Medtronic yields 2.77%, the richest payout of the three. The quarterly dividend of $0.72 works out to $2.88 a year.
Dividend safety: Fiscal 2027 non-GAAP EPS guidance of $5.94 to $6.00 puts the payout at about 48.2% of earnings at the midpoint. Fiscal 2026 brought $7.33 billion in operating cash flow and $5.426 billion in free cash flow. In the latest quarter, free cash flow jumped 121% to $1.29 billion, comfortably above the $921 million paid in dividends. Dividends took about 71.4% of that quarter’s free cash flow. The chief financial officer called cash conversion "improving" and said, "We’ve got a strong balance sheet."
Track record: The latest raise marked Medtronic’s 49th consecutive year of dividend increases, which puts the half-century mark within reach. The dividend history shows the quarterly payment growing from $0.05 in 2001 to $0.72 today.
The bull case: Heart rhythm problems and chronic disease become more common with age, and Medtronic’s heart business is growing fast. Cardiac Ablation Solutions grew 88% last quarter, and the company raised its full-year guidance. Revenue rose 13.7% to $9.76 billion, although an extra fiscal week added about $570 million. Management cited "resilient demand across chronic disease, high acuity conditions, and life-saving interventions." At 17x forward earnings, Medtronic is the cheapest of the three on that measure.
The risk: The raises are small. The quarterly payment went from $0.71 to $0.72, a one-cent increase that protects the streak but adds little to your income. Retirees who count on rising payouts to keep up with inflation should expect slow growth here unless cash flow keeps improving.
Three Health Care Payers Built for an Aging Population
Johnson & Johnson, Abbott and Medtronic have each raised dividends for decades, and each covers its payout with adjusted earnings and free cash flow to spare. Johnson & Johnson brings the longest streak and a AAA balance sheet. Abbott pairs Aristocrat status with a management team openly committed to another raise, and Medtronic offers the highest yield at the lowest forward multiple. If this kind of multi-decade payer is what you want more of, we ranked ten of them by valuation in a free Dividend Kings report. The next things to watch are Johnson & Johnson’s litigation costs, the terms of Abbott’s nutrition spinoff and whether Medtronic’s stronger cash flow leads to bigger raises.
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
