We recently published a list of the Best Income Stocks to Invest in Now. In this article, we are going to take a look at where Johnson & Johnson (NYSE:JNJ) stands against other best income stocks.
Amid concerns over trade restrictions and a weakening economy, some investors are seeking stability in dividend-paying stocks—a traditional defensive strategy. While safe-haven assets like gold and US Treasurys have seen increased demand and more economically sensitive stocks such as small caps and financials have faced outflows, many favor dividend stocks for their dual benefits: the potential for capital appreciation and the steady income from dividends, which can help offset market declines.
This renewed interest comes after a challenging period for dividend stocks. Rising interest rates had made bonds more appealing to income-seeking investors, while excitement around artificial intelligence propelled growth stocks—especially the Magnificent Seven tech names—to new heights, leaving many established dividend-paying firms overlooked.
Analysts also support dividend stocks for income portfolios, especially in times of market volatility. Financial advisor Michael Dinich discussed dividend investing in an interview with Business Insider. Here are some comments from the analyst:
“While low-cost index funds provide easily diversified exposure to the market with minimal effort, selecting individual dividend payers demands continued research to find suitable candidates.”
He pointed out that dividend-paying stocks can be a dependable source of income, offering investors the flexibility to either reinvest the proceeds for compounding growth or use the cash to meet financial obligations. This feature makes dividend stocks particularly appealing to younger investors, as they provide steady income along with exposure to the broader market. His remarks echoed the long-term significance of dividends in overall market returns. Data from S&P Dow Jones Indices showed that between 1926 and July 2023, dividends made up 32% of the total monthly return of the broader market, with the rest coming from price gains.
Research from WisdomTree also underlined the strong income-generating capacity of dividend-paying stocks. Their analysis indicated that a dividend-focused strategy could enhance investors’ income and improve the trailing 12-month dividend yield. This method becomes even more useful during times of low interest rates and heightened market volatility. Allocating investments to dividend-weighted indexes may therefore offer a consistent income strategy in uncertain market environments.
With investor interest in dividends on the rise, companies across the US and globally are steadily boosting their payouts. In 2024, global dividend payments reached a record $1.75 trillion, according to the Janus Henderson Global Dividend Index, reflecting a 6.6% increase on an underlying basis. Headline growth came in at 5.2%, slightly lower due to fewer special dividends and a stronger US dollar. The total slightly surpassed Janus Henderson’s earlier projection of $1.73 trillion, thanks to better-than-expected performance in the US and Japan during the final quarter, when Q4 dividends rose 7.3% on an underlying basis.
Throughout the year, solid growth was also seen in Europe, with emerging markets like India and parts of Asia, including Singapore and South Korea, showing respectable increases. Out of 49 countries tracked, 17—including major contributors like the US, Canada, France, Japan, and China—hit record dividend levels. The report noted that 88% of companies either raised or maintained their dividends, with the median increase coming in at 6.7%.
Looking ahead, Janus Henderson forecasts global dividends will rise by 5.0% in headline terms in 2025, reaching another all-time high of $1.83 trillion. When adjusting for currency effects, underlying growth is expected to be around 5.1%.
Is Johnson & Johnson (JNJ) the Best Income Stock to Invest in Now?
A smiling baby with an array of baby care products in the foreground.
Our Methodology:
For this article, we used a stock screener to pick companies that have raised their dividends for at least 10 consecutive years or more. The consistent dividend growth reflects the reliability of these stocks as income-generating investments for shareholders. From that group, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. The stocks are ranked in ascending order of the number of hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Johnson & Johnson (NYSE:JNJ) is a leading US-based multinational focused on pharmaceuticals, biotech, and medical technology. The company reported solid first-quarter 2025 results. Revenue reached $21.9 billion, up 2.4% from the same period last year and beating expectations by $315.6 million. Net income surged to $11 billion, marking a year-over-year increase of 238%.
Johnson & Johnson (NYSE:JNJ) made notable strides in innovation during the quarter, pushing forward key pipeline projects such as TREMFYA for inflammatory bowel disease, a drug combination involving RYBREVANT and LAZCLUZE for treating non-small-cell lung cancer, and progress with OTTAVA, its robotic surgery platform. It also broadened its neuroscience capabilities through the acquisition of Intra-Cellular Therapies.
From a dividend point of view, Johnson & Johnson (NYSE:JNJ) remained financially strong, generating $3.4 billion in free cash flow, up from $2.8 billion the year before. On April 15, the company raised its quarterly dividend by 4.8% to $1.30 per share, marking its 63rd straight year of dividend growth. The stock supports a dividend yield of 3.37%, as of May 9.
Overall, JNJ ranks 2nd on our list of the best income stocks to buy now. While we acknowledge the potential of JNJ as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than JNJ but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
