JNJ vs TGT: Dividend Comparison
Dividend data as of
Johnson & Johnson (JNJ) from Health Care and Target Corp (TGT) from Consumer Staples offer different dividend profiles for income-focused portfolios. TGT offers a significantly higher 4.01% yield compared to JNJ's 2.16%, a gap of 1.86%. For dividend growth, TGT leads with a 5-year CAGR of 9.4% versus JNJ's 5.2%. Both stocks carry a "Safe" dividend safety rating. JNJ is a Dividend King while TGT is a Dividend Aristocrat.
Verdict
Yield Analysis
TGT yields 1.86% more than JNJ. In dollar terms, JNJ pays $5.14/share vs TGT's $4.50/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%.
TGT: Dividend growth is slowing — the 3-year CAGR of 1.8% trails the 5-year rate of 9.4% and the 10-year rate of 11.1%.
Dividend Safety
JNJ: The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
TGT: The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in JNJ vs TGT 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 $115.49 per share, $10,000 buys about 86.6 shares of Target Corp (TGT). Each share pays $4.50 per year in dividends, so the position starts out generating roughly $390 per year — about $32 a month.
TGT is the larger income stream from day one: $179 per year more on the same $10,000 invested.
What could $10,000 of JNJ or TGT 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.
Target Corp (TGT) has raised its dividend about 9.4% a year over the past five years. If that pace held, the $401 per year that $10,000 generates today at the current 4.01% yield would reach $982 per year by 2036 — a 9.8% yield on the original cost.
On those trailing rates, TGT pays more in 2036: $982 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 TGT's higher yield?
It doesn't, on the trailing numbers. Target Corp (TGT) yields more today (4.01% vs 2.16%) and has also grown its dividend at least as fast (9.4% vs 5.2% a year over five years). Unless JNJ accelerates its raises or TGT stumbles, JNJ never closes the income gap — TGT wins on both current income and growth.
Can JNJ and TGT 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).
Target Corp (TGT) earns $8.25 per share against $4.50 paid out in dividends — 1.8x coverage (a 55% 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 TGT if earnings weaken.
Which fits an early-retirement income portfolio better, JNJ or TGT?
For income you need right now, Target Corp (TGT) leads: $100,000 invested today pays about $335 a month at the current 4.01% yield, versus $180 a month from Johnson & Johnson (JNJ) at 2.16%.
TGT also leads on dividend growth (9.4% 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; TGT has raised its dividend 42 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 $1,456/yr in TGT 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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