AFL vs JNJ: Dividend Yield, Growth & Safety Comparison
Aflac Inc (AFL) from Financials and Johnson & Johnson (JNJ) from Health Care offer different dividend profiles for income-focused portfolios. Both stocks offer similar yields — AFL at 2.11% and JNJ at 2.16%. For dividend growth, AFL leads with a 5-year CAGR of 15.1% versus JNJ's 5.2%. Both stocks carry a "Safe" dividend safety rating. AFL is a Dividend Aristocrat while JNJ is a Dividend King.
Key Metrics Comparison
| Metric | AFL | JNJ |
|---|
| Dividend Yield | 2.11% | 2.16% |
| Annual Dividend | $2.44 | $5.14 |
| 5-Year CAGR | 15.1% | 5.2% |
| Payout Ratio | 34% | 47% |
| Consecutive Years | 41 | 63 |
| Price | $115.04 | $243.53 |
Yield Comparison
Johnson & Johnson (JNJ) currently yields 2.16%, which is solid for the broader market. Aflac Inc (AFL) yields a nearly identical 2.11%. In dollar terms, JNJ pays $5.14/share annually versus AFL's $2.44/share.
Dividend Growth
Over the past five years, AFL has grown its dividend at a 15.1% CAGR compared to JNJ's 5.2%. AFL: Dividend growth is accelerating — the 3-year CAGR of 35.7% exceeds the 5-year rate of 15.1% and the 10-year rate of 15.7%. 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
AFL's dividend safety is rated "Safe." The payout ratio of 34% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.8x. 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. AFL's payout ratio of 34% is more conservative than JNJ's 47%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in JNJ generates approximately $216/year in dividend income, compared to $211/year from AFL — a difference of $5/year. At $100,000, that gap widens to $50/year.
Verdict
- Best for growth: AFL
- Best for safety: AFL
Frequently Asked Questions
Which has a higher dividend yield, AFL or JNJ?
Johnson & Johnson (JNJ) has a higher dividend yield of 2.16% compared to Aflac Inc (AFL) at 2.11%.
Is AFL or JNJ a better dividend growth stock?
Aflac Inc has the stronger dividend growth with a 5-year CAGR of 15.1%, compared to Johnson & Johnson's 5.2%.
Which is safer for dividend income, AFL or JNJ?
Aflac Inc's dividend safety is rated "Safe" while Johnson & Johnson is rated "Safe." The payout ratio of 34% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.8x. 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 AFL vs JNJ generate?
A $10,000 investment in AFL generates approximately $211/year in dividends, while the same amount in JNJ generates about $216/year.
Is AFL or JNJ a Dividend Aristocrat?
Aflac Inc is a Dividend Aristocrat (41 years) and Johnson & Johnson is a Dividend King (63 years).
Which has a lower payout ratio, AFL or JNJ?
Aflac Inc has a lower payout ratio of 34% compared to Johnson & Johnson's 47%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AFL vs JNJ: which is better for retirement income?
It depends on your priorities. AFL for dividend growth, AFL for safety. Many retirement investors hold both for diversification.
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