JNJ vs UNH: Dividend Comparison
Dividend data as of
Johnson & Johnson (JNJ) and Unitedhealth Group Inc (UNH) are both in the Health Care sector, making them natural rivals for dividend investors. UNH offers a significantly higher 3.20% yield compared to JNJ's 2.16%, a gap of 1.04%. For dividend growth, UNH leads with a 5-year CAGR of 11.7% versus JNJ's 5.2%. Both stocks carry a "Safe" dividend safety rating. JNJ is a Dividend King while UNH is a Dividend Contender.
Verdict
Yield Analysis
UNH yields 1.04% more than JNJ. In dollar terms, JNJ pays $5.14/share vs UNH's $8.73/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%.
UNH: Dividend growth is slowing — the 3-year CAGR of 9.4% trails the 5-year rate of 11.7% and the 10-year rate of 15.6%.
Dividend Safety
JNJ: The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
UNH: The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in JNJ vs UNH 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 $291.12 per share, $10,000 buys about 34.4 shares of Unitedhealth Group Inc (UNH). Each share pays $8.73 per year in dividends, so the position starts out generating roughly $300 per year — about $25 a month.
UNH is the larger income stream from day one: $89 per year more on the same $10,000 invested.
What could $10,000 of JNJ or UNH 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.
Unitedhealth Group Inc (UNH) has raised its dividend about 11.7% a year over the past five years. If that pace held, the $320 per year that $10,000 generates today at the current 3.20% yield would reach $970 per year by 2036 — a 9.7% yield on the original cost.
On those trailing rates, UNH pays more in 2036: $970 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 UNH's higher yield?
It doesn't, on the trailing numbers. Unitedhealth Group Inc (UNH) yields more today (3.20% vs 2.16%) and has also grown its dividend at least as fast (11.7% vs 5.2% a year over five years). Unless JNJ accelerates its raises or UNH stumbles, JNJ never closes the income gap — UNH wins on both current income and growth.
Can JNJ and UNH 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).
Unitedhealth Group Inc (UNH) earns $19.19 per share against $8.73 paid out in dividends — 2.2x coverage (a 45% payout ratio).
Coverage is similar for both, so neither dividend looks meaningfully more stretched than the other on current earnings.
Which fits an early-retirement income portfolio better, JNJ or UNH?
For income you need right now, Unitedhealth Group Inc (UNH) leads: $100,000 invested today pays about $266 a month at the current 3.20% yield, versus $180 a month from Johnson & Johnson (JNJ) at 2.16%.
UNH also leads on dividend growth (11.7% 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; UNH has raised its dividend 16 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 $1,328/yr in UNH 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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