JNJ vs MRK: Dividend Yield, Growth & Safety Comparison
Johnson & Johnson (JNJ) and Merck & Co., Inc. (MRK) are both in the Health Care sector, making them natural rivals for dividend investors. MRK edges ahead on yield at 2.77% versus JNJ's 2.16%. Both stocks show similar dividend growth rates, each around 5.2% over the past five years. Both stocks carry a "Safe" dividend safety rating. JNJ is a Dividend King while MRK is a Dividend Contender.
Key Metrics Comparison
| Metric | JNJ | MRK |
|---|
| Dividend Yield | 2.16% | 2.77% |
| Annual Dividend | $5.14 | $3.24 |
| 5-Year CAGR | 5.2% | 5.9% |
| Payout Ratio | 47% | 45% |
| Consecutive Years | 63 | 15 |
| Price | $243.53 | $121.49 |
Yield Comparison
Merck & Co., Inc. (MRK) currently yields 2.77%, which is solid for the broader market. That's 0.61% more than Johnson & Johnson (JNJ), which yields 2.16%. In dollar terms, MRK pays $3.24/share annually versus JNJ's $5.14/share.
Dividend Growth
Over the past five years, MRK has grown its dividend at a 5.9% CAGR compared to JNJ's 5.2%. 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%. MRK: Dividend growth is slowing — the 3-year CAGR of 5.3% trails the 5-year rate of 5.9% and the 10-year rate of 7.1%.
Dividend Safety
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. MRK's dividend safety is rated "Safe." The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x. Both have similar payout ratios — JNJ at 47% and MRK at 45%.
Income Comparison
A $10,000 investment in MRK generates approximately $277/year in dividend income, compared to $216/year from JNJ — a difference of $61/year. At $100,000, that gap widens to $610/year.
Verdict
- Best for income: MRK
- Best for growth: MRK
Frequently Asked Questions
Which has a higher dividend yield, JNJ or MRK?
Merck & Co., Inc. (MRK) has a higher dividend yield of 2.77% compared to Johnson & Johnson (JNJ) at 2.16%.
Is JNJ or MRK a better dividend growth stock?
Merck & Co., Inc. has the stronger dividend growth with a 5-year CAGR of 5.9%, compared to Johnson & Johnson's 5.2%.
Which is safer for dividend income, JNJ or MRK?
Johnson & Johnson's dividend safety is rated "Safe" while Merck & Co., Inc. is rated "Safe." The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x. The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
How much income does $10,000 in JNJ vs MRK generate?
A $10,000 investment in JNJ generates approximately $216/year in dividends, while the same amount in MRK generates about $277/year.
Is JNJ or MRK a Dividend Aristocrat?
Johnson & Johnson is a Dividend King (63 years) and Merck & Co., Inc. is a Dividend Contender (15 years).
Which has a lower payout ratio, JNJ or MRK?
Merck & Co., Inc. has a lower payout ratio of 45% compared to Johnson & Johnson's 47%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
JNJ vs MRK: which is better for retirement income?
It depends on your priorities. MRK for current income, MRK for dividend growth. Many retirement investors hold both for diversification.
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