AMGN vs JNJ: Dividend Comparison
Dividend data as of
Amgen Inc (AMGN) and Johnson & Johnson (JNJ) are both in the Health Care sector, making them natural rivals for dividend investors. AMGN edges ahead on yield at 2.61% versus JNJ's 2.16%. For dividend growth, AMGN leads with a 5-year CAGR of 15.9% versus JNJ's 5.2%. JNJ holds the edge in dividend safety with a "Safe" rating. AMGN is a Dividend Contender while JNJ is a Dividend King.
Verdict
Yield Analysis
AMGN yields 0.45% more than JNJ. In dollar terms, AMGN pays $9.52/share vs JNJ's $5.14/share annually.
Dividend Growth
AMGN: Dividend growth is slowing — the 3-year CAGR of 5.7% trails the 5-year rate of 15.9% and the 10-year rate of 13.7%.
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
AMGN: The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x.
JNJ: The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in AMGN vs JNJ today?
At $369.70 per share, $10,000 buys about 27.0 shares of Amgen Inc (AMGN). Each share pays $9.52 per year in dividends, so the position starts out generating roughly $258 per year — about $21 a month.
At $243.53 per share, $10,000 buys about 41.1 shares of Johnson & Johnson (JNJ). Each share pays $5.14 per year in dividends, so the position starts out generating roughly $211 per year — about $18 a month.
AMGN is the larger income stream from day one: $46 per year more on the same $10,000 invested.
What could $10,000 of AMGN or JNJ income look like in 10 years?
Amgen Inc (AMGN) has raised its dividend about 15.9% a year over the past five years. If that pace held, the $261 per year that $10,000 generates today at the current 2.61% yield would reach $1,140 per year by 2036 — a 11.4% yield on the original cost.
Johnson & Johnson (JNJ) has raised its dividend about 5.2% a year over the past five years. If that pace held, the $216 per year that $10,000 generates today at the current 2.16% yield would reach $359 per year by 2036 — a 3.6% yield on the original cost.
On those trailing rates, AMGN pays more in 2036: $1,140 versus $359 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would JNJ's dividend growth overtake AMGN's higher yield?
It doesn't, on the trailing numbers. Amgen Inc (AMGN) yields more today (2.61% vs 2.16%) and has also grown its dividend at least as fast (15.9% vs 5.2% a year over five years). Unless JNJ accelerates its raises or AMGN stumbles, JNJ never closes the income gap — AMGN wins on both current income and growth.
Can AMGN and JNJ afford their dividends?
Amgen Inc (AMGN) earns $14.24 per share against $9.52 paid out in dividends — 1.5x coverage (a 67% payout ratio).
Johnson & Johnson (JNJ) earns $11.03 per share against $5.14 paid out in dividends — 2.1x coverage (a 47% payout ratio).
JNJ's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for AMGN if earnings weaken.
Which fits an early-retirement income portfolio better, AMGN or JNJ?
For income you need right now, Amgen Inc (AMGN) leads: $100,000 invested today pays about $218 a month at the current 2.61% yield, versus $180 a month from Johnson & Johnson (JNJ) at 2.16%.
AMGN also leads on dividend growth (15.9% vs 5.2% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: AMGN has raised its dividend 14 consecutive years; JNJ has raised its dividend 63 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,475/yr in AMGN vs $445/yr in JNJ by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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