Summary
- Johnson & Johnson and Pfizer are both mega-cap healthcare stocks that pay dividends to shareholders.
- However, they have somewhat different business models, and have different dividend yields and histories of dividend increases.
- While both companies are highly profitable and have secure dividends, Johnson & Johnson seems to be the better long-term stock.
The pharmaceutical industry has proven a great investment sphere for risk-averse income investors, as the industry benefits from several positives, including the non-cyclical nature of its products. Even during times when the economy is not doing well, patients still need medicine.
The largest players in this industry are diversified across therapeutic areas as well as geographically, which means that patent issues and pressure from politicians in one single country to lower the price of their treatments affect them to a smaller degree compared to smaller, more focused pharma companies that may only have a couple of products on the market.
In this article, we will take a closer look at Johnson & Johnson (JNJ) and Pfizer (PFE), the two largest US-based pharmaceutical companies by market capitalization.
Both are high-quality dividend stocks. Johnson & Johnson is a Dividend King, which means that the company has raised its dividend annually for more than 50 years in a row. You can see the full list of Dividend Kings here, the cream of the crop for dividend growth investors.
