JNJ vs PFE: Dividend Yield, Growth & Safety Comparison
Johnson & Johnson (JNJ) and Pfizer Inc (PFE) are both in the Health Care sector, making them natural rivals for dividend investors. PFE offers a significantly higher 6.23% yield compared to JNJ's 2.16%, a gap of 4.07%. For dividend growth, PFE leads with a 5-year CAGR of 10.1% 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 | JNJ | PFE |
|---|
| Dividend Yield | 2.16% | 6.23% |
| Annual Dividend | $5.14 | $1.72 |
| 5-Year CAGR | 5.2% | 10.1% |
| Payout Ratio | 47% | 1% |
| Consecutive Years | 63 | 0 |
| Price | $243.53 | $27.80 |
Yield Comparison
Pfizer Inc (PFE) currently yields 6.23%, which is attractive for the broader market. That's 4.07% more than Johnson & Johnson (JNJ), which yields 2.16%. In dollar terms, PFE pays $1.72/share annually versus JNJ's $5.14/share.
Dividend Growth
Over the past five years, PFE has grown its dividend at a 10.1% 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%. PFE: Dividend growth is accelerating — the 3-year CAGR of 18.3% exceeds the 5-year rate of 10.1% and the 10-year rate of 8.1%.
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. PFE's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. PFE's payout ratio of 1% is more conservative than JNJ's 47%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in PFE generates approximately $623/year in dividend income, compared to $216/year from JNJ — a difference of $407/year. At $100,000, that gap widens to $4070/year.
Verdict
- Best for income: PFE
- Best for growth: PFE
- Best for safety: PFE
Frequently Asked Questions
Which has a higher dividend yield, JNJ or PFE?
Pfizer Inc (PFE) has a higher dividend yield of 6.23% compared to Johnson & Johnson (JNJ) at 2.16%.
Is JNJ or PFE a better dividend growth stock?
Pfizer Inc has the stronger dividend growth with a 5-year CAGR of 10.1%, compared to Johnson & Johnson's 5.2%.
Which is safer for dividend income, JNJ or PFE?
Johnson & Johnson's dividend safety is rated "Safe" while Pfizer 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 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x.
How much income does $10,000 in JNJ vs PFE generate?
A $10,000 investment in JNJ generates approximately $216/year in dividends, while the same amount in PFE generates about $623/year.
Is JNJ or PFE a Dividend Aristocrat?
Johnson & Johnson is a Dividend King with 63 consecutive years of increases. Pfizer Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, JNJ or PFE?
Pfizer Inc has a lower payout ratio of 1% compared to Johnson & Johnson's 47%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
JNJ vs PFE: which is better for retirement income?
It depends on your priorities. PFE for current income, PFE for dividend growth, PFE for safety. Many retirement investors hold both for diversification.
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