JNJ vs WST: Dividend Comparison
Dividend data as of
Johnson & Johnson (JNJ) and West Pharmaceutical Services Inc (WST) are both in the Health Care sector, making them natural rivals for dividend investors. JNJ offers a significantly higher 2.16% yield compared to WST's 0.34%, a gap of 1.81%. For dividend growth, WST leads with a 5-year CAGR of 13.1% versus JNJ's 5.2%. Both stocks carry a "Safe" dividend safety rating. JNJ is a Dividend King with 63 years of consecutive increases.
Verdict
Yield Analysis
JNJ yields 1.81% more than WST. In dollar terms, JNJ pays $5.14/share vs WST's $0.84/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%.
WST: Dividend growth is accelerating — the 3-year CAGR of 21.1% exceeds the 5-year rate of 13.1% and the 10-year rate of 9.7%.
Dividend Safety
JNJ: The payout ratio of 47% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.1x.
WST: The payout ratio of 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in JNJ vs WST 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 $248.03 per share, $10,000 buys about 40.3 shares of West Pharmaceutical Services Inc (WST). Each share pays $0.84 per year in dividends, so the position starts out generating roughly $34 per year — about $3 a month.
JNJ is the larger income stream from day one: $177 per year more on the same $10,000 invested.
What could $10,000 of JNJ or WST 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.
West Pharmaceutical Services Inc (WST) has raised its dividend about 13.1% a year over the past five years. If that pace held, the $34 per year that $10,000 generates today at the current 0.34% yield would reach $118 per year by 2036 — a 1.2% yield on the original cost.
On those trailing rates, JNJ pays more in 2036: $359 versus $118 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would WST's dividend growth overtake JNJ's higher yield?
West Pharmaceutical Services Inc (WST) yields less today (0.34% vs 2.16%) but has grown its dividend faster — 13.1% vs 5.2% a year over the past five years. If both trends continued, a $10,000 position in WST would start out-earning the same position in JNJ around 2052 (roughly 26 years from now), paying about $841 per year at the crossover. Before that point, JNJ pays more each year; after it, the gap compounds in WST's favor.
Can JNJ and WST 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).
West Pharmaceutical Services Inc (WST) earns $6.75 per share against $0.84 paid out in dividends — 8.0x coverage (a 12% payout ratio).
WST'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 JNJ if earnings weaken.
Which fits an early-retirement income portfolio better, JNJ or WST?
For income you need right now, Johnson & Johnson (JNJ) leads: $100,000 invested today pays about $180 a month at the current 2.16% yield, versus $29 a month from West Pharmaceutical Services Inc (WST) at 0.34%.
With a decade or more before the income is needed, WST's faster dividend growth (13.1% vs 5.2% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
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 $122/yr in WST 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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