BMY vs JNJ: Dividend Comparison
Dividend data as of
Bristol Myers Squibb Co (BMY) and Johnson & Johnson (JNJ) are both in the Health Care sector, making them natural rivals for dividend investors. BMY offers a significantly higher 4.09% yield compared to JNJ's 2.16%, a gap of 1.93%. For dividend growth, BMY leads with a 5-year CAGR of 14.0% versus JNJ's 5.2%. JNJ holds the edge in dividend safety with a "Safe" rating. JNJ is a Dividend King with 63 years of consecutive increases.
Verdict
Yield Analysis
BMY yields 1.93% more than JNJ. In dollar terms, BMY pays $2.49/share vs JNJ's $5.14/share annually.
Dividend Growth
BMY: Dividend growth is accelerating — the 3-year CAGR of 20.4% exceeds the 5-year rate of 14.0% and the 10-year rate of 9.0%.
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
BMY: The payout ratio of 72% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
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 BMY vs JNJ today?
At $60.77 per share, $10,000 buys about 164.5 shares of Bristol Myers Squibb Co (BMY). Each share pays $2.49 per year in dividends, so the position starts out generating roughly $410 per year — about $34 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.
BMY is the larger income stream from day one: $199 per year more on the same $10,000 invested.
What could $10,000 of BMY or JNJ income look like in 10 years?
Bristol Myers Squibb Co (BMY) has raised its dividend about 14.0% a year over the past five years. If that pace held, the $409 per year that $10,000 generates today at the current 4.09% yield would reach $1,513 per year by 2036 — a 15.1% 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, BMY pays more in 2036: $1,513 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 BMY's higher yield?
It doesn't, on the trailing numbers. Bristol Myers Squibb Co (BMY) yields more today (4.09% vs 2.16%) and has also grown its dividend at least as fast (14.0% vs 5.2% a year over five years). Unless JNJ accelerates its raises or BMY stumbles, JNJ never closes the income gap — BMY wins on both current income and growth.
Can BMY and JNJ afford their dividends?
Bristol Myers Squibb Co (BMY) earns $3.46 per share against $2.49 paid out in dividends — 1.4x coverage (a 72% 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 BMY if earnings weaken.
Which fits an early-retirement income portfolio better, BMY or JNJ?
For income you need right now, Bristol Myers Squibb Co (BMY) leads: $100,000 invested today pays about $341 a month at the current 4.09% yield, versus $180 a month from Johnson & Johnson (JNJ) at 2.16%.
BMY also leads on dividend growth (14.0% vs 5.2% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: 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 $2,259/yr in BMY 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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