JNJ vs WST: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | JNJ | WST |
|---|
| Dividend Yield | 2.16% | 0.34% |
| Annual Dividend | $5.14 | $0.84 |
| 5-Year CAGR | 5.2% | 13.1% |
| Payout Ratio | 47% | 12% |
| Consecutive Years | 63 | 0 |
| Price | $243.53 | $248.03 |
Yield Comparison
Johnson & Johnson (JNJ) currently yields 2.16%, which is solid for the broader market. That's 1.81% more than West Pharmaceutical Services Inc (WST), which yields 0.34%. In dollar terms, JNJ pays $5.14/share annually versus WST's $0.84/share.
Dividend Growth
Over the past five years, WST has grown its dividend at a 13.1% 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%. 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'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. WST's dividend safety is rated "Safe." The payout ratio of 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x. WST's payout ratio of 12% is more conservative than JNJ's 47%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in JNJ generates approximately $216/year in dividend income, compared to $34/year from WST — a difference of $182/year. At $100,000, that gap widens to $1820/year.
Verdict
- Best for income: JNJ
- Best for growth: WST
- Best for safety: WST
Frequently Asked Questions
Which has a higher dividend yield, JNJ or WST?
Johnson & Johnson (JNJ) has a higher dividend yield of 2.16% compared to West Pharmaceutical Services Inc (WST) at 0.34%.
Is JNJ or WST a better dividend growth stock?
West Pharmaceutical Services Inc has the stronger dividend growth with a 5-year CAGR of 13.1%, compared to Johnson & Johnson's 5.2%.
Which is safer for dividend income, JNJ or WST?
Johnson & Johnson's dividend safety is rated "Safe" while West Pharmaceutical Services 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 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x.
How much income does $10,000 in JNJ vs WST generate?
A $10,000 investment in JNJ generates approximately $216/year in dividends, while the same amount in WST generates about $34/year.
Is JNJ or WST a Dividend Aristocrat?
Johnson & Johnson is a Dividend King with 63 consecutive years of increases. West Pharmaceutical Services Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, JNJ or WST?
West Pharmaceutical Services Inc has a lower payout ratio of 12% compared to Johnson & Johnson's 47%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
JNJ vs WST: which is better for retirement income?
It depends on your priorities. JNJ for current income, WST for dividend growth, WST for safety. Many retirement investors hold both for diversification.
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