ABBV vs JNJ: Dividend Yield, Growth & Safety Comparison
AbbVie Inc. (ABBV) and Johnson & Johnson (JNJ) are both in the Health Care sector, making them natural rivals for dividend investors. ABBV edges ahead on yield at 2.92% versus JNJ's 2.16%. For dividend growth, ABBV leads with a 5-year CAGR of 13.9% versus JNJ's 5.2%. Both stocks carry a "Safe" dividend safety rating. JNJ is a Dividend King with 63 years of consecutive increases.
Key Metrics Comparison
| Metric | ABBV | JNJ |
|---|
| Dividend Yield | 2.92% | 2.16% |
| Annual Dividend | $6.65 | $5.14 |
| 5-Year CAGR | 13.9% | 5.2% |
| Payout Ratio | 3% | 47% |
| Consecutive Years | 0 | 63 |
| Price | $231.90 | $243.53 |
Yield Comparison
AbbVie Inc. (ABBV) currently yields 2.92%, which is solid for the broader market. That's 0.76% more than Johnson & Johnson (JNJ), which yields 2.16%. In dollar terms, ABBV pays $6.65/share annually versus JNJ's $5.14/share.
Dividend Growth
Over the past five years, ABBV has grown its dividend at a 13.9% CAGR compared to JNJ's 5.2%. ABBV: Dividend growth is accelerating — the 3-year CAGR of 21.6% exceeds the 5-year rate of 13.9% and the 10-year rate of 16.1%. JNJ: Dividend growth is slowing — the 3-year CAGR of 4.6% trails the 5-year rate of 5.2% and the 10-year rate of 5.6%.
Dividend Safety
ABBV's dividend safety is rated "Safe." The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.4x. JNJ's dividend safety is rated "Safe." The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x. ABBV's payout ratio of 3% is more conservative than JNJ's 47%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in ABBV generates approximately $292/year in dividend income, compared to $216/year from JNJ — a difference of $76/year. At $100,000, that gap widens to $760/year.
Verdict
- Best for income: ABBV
- Best for growth: ABBV
- Best for safety: ABBV
Frequently Asked Questions
Which has a higher dividend yield, ABBV or JNJ?
AbbVie Inc. (ABBV) has a higher dividend yield of 2.92% compared to Johnson & Johnson (JNJ) at 2.16%.
Is ABBV or JNJ a better dividend growth stock?
AbbVie Inc. has the stronger dividend growth with a 5-year CAGR of 13.9%, compared to Johnson & Johnson's 5.2%.
Which is safer for dividend income, ABBV or JNJ?
AbbVie Inc.'s dividend safety is rated "Safe" while Johnson & Johnson is rated "Safe." The payout ratio of 3% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.4x. The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
How much income does $10,000 in ABBV vs JNJ generate?
A $10,000 investment in ABBV generates approximately $292/year in dividends, while the same amount in JNJ generates about $216/year.
Is ABBV or JNJ a Dividend Aristocrat?
Johnson & Johnson is a Dividend King with 63 consecutive years of increases. AbbVie Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, ABBV or JNJ?
AbbVie Inc. has a lower payout ratio of 3% compared to Johnson & Johnson's 47%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
ABBV vs JNJ: which is better for retirement income?
It depends on your priorities. ABBV for current income, ABBV for dividend growth, ABBV for safety. Many retirement investors hold both for diversification.
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