JNJ vs PG: Dividend Comparison
Dividend data as of
Johnson & Johnson (JNJ) from Health Care and PROCTER & GAMBLE Co (PG) from Consumer Staples offer different dividend profiles for income-focused portfolios. PG edges ahead on yield at 2.63% versus JNJ's 2.16%. For dividend growth, PG leads with a 5-year CAGR of 12.5% 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
PG yields 0.47% more than JNJ. In dollar terms, JNJ pays $5.14/share vs PG's $4.18/share annually.
Dividend Growth
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%.
PG: Dividend growth is accelerating — the 3-year CAGR of 21.6% exceeds the 5-year rate of 12.5% and the 10-year rate of 8.5%.
Dividend Safety
JNJ: The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
PG: The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in JNJ vs PG today?
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.
At $160.56 per share, $10,000 buys about 62.3 shares of PROCTER & GAMBLE Co (PG). Each share pays $4.18 per year in dividends, so the position starts out generating roughly $260 per year — about $22 a month.
PG is the larger income stream from day one: $49 per year more on the same $10,000 invested.
What could $10,000 of JNJ or PG income look like in 10 years?
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.
PROCTER & GAMBLE Co (PG) has raised its dividend about 12.5% a year over the past five years. If that pace held, the $263 per year that $10,000 generates today at the current 2.63% yield would reach $851 per year by 2036 — a 8.5% yield on the original cost.
On those trailing rates, PG pays more in 2036: $851 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 PG's higher yield?
It doesn't, on the trailing numbers. PROCTER & GAMBLE Co (PG) yields more today (2.63% vs 2.16%) and has also grown its dividend at least as fast (12.5% vs 5.2% a year over five years). Unless JNJ accelerates its raises or PG stumbles, JNJ never closes the income gap — PG wins on both current income and growth.
Can JNJ and PG afford their dividends?
Johnson & Johnson (JNJ) earns $11.03 per share against $5.14 paid out in dividends — 2.1x coverage (a 47% payout ratio).
PROCTER & GAMBLE Co (PG) earns $6.75 per share against $4.18 paid out in dividends — 1.6x coverage (a 62% 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 PG if earnings weaken.
Which fits an early-retirement income portfolio better, JNJ or PG?
For income you need right now, PROCTER & GAMBLE Co (PG) leads: $100,000 invested today pays about $219 a month at the current 2.63% yield, versus $180 a month from Johnson & Johnson (JNJ) at 2.16%.
PG also leads on dividend growth (12.5% 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 $445/yr in JNJ vs $1,103/yr in PG 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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