Johnson & Johnson Raises Dividend 3.1%, Extends 64-Year Streak

Johnson & Johnson raised its quarterly dividend 3.1% to $1.34 per share from $1.30, setting the annual rate at $5.36. The first payment at the new rate had an ex-dividend date of May 26, 2026. The company said the increase marked its 64th consecutive year of dividend growth, a longer record than the 55-year streak captured by completed annual payments. Johnson & Johnson’s declaration confirms the company-reported record.

Why the dividend changed

Johnson & Johnson did not attach a specific financial target or capital-allocation change to the increase. The board presented it as a regular quarterly dividend action, not as the result of a stock split, merger or completed spinoff. The timing nevertheless coincided with stronger operating results and higher guidance, providing context for the board’s decision.

On the day of the declaration, Johnson & Johnson reported first-quarter sales of $24.1 billion, up 9.9%, while adjusted operational sales grew 5.3%. The company raised its full-year outlook to estimated reported sales of $100.8 billion and adjusted earnings of $11.55 per share at the midpoint. Innovative Medicine growth was led by products including DARZALEX, CARVYKTI, TREMFYA and SPRAVATO, while biosimilar competition weighed on STELARA. MedTech benefited from electrophysiology, Abiomed, Shockwave and trauma products. The first-quarter release provides the results and guidance.

Subsequent results strengthened that operating backdrop. Second-quarter sales reached $25.3 billion, up 6.6%, and management again raised the outlook, this time to estimated reported sales of $101.1 billion and adjusted earnings of $11.68 per share at the midpoint. Chief Executive Joaquin Duato pointed to portfolio depth and pipeline momentum, while acknowledging through the product results that newer medicines must offset pressure on older franchises. Johnson & Johnson’s second-quarter report details the updated outlook.

Dividend track record

The payment record shows a consistent pattern of one increase each year. Quarterly payments were $1.24 through the February 18, 2025 ex-dividend date, moved to $1.30 on May 27, 2025, remained there through February 24, 2026, and increased to $1.34 on May 26, 2026. The same $1.34 rate applied on the August 25, 2026 ex-dividend date.

Full-year dividends rose from $3.98 per share in 2020 to $4.19 in 2021, $4.45 in 2022, $4.70 in 2023, $4.91 in 2024 and $5.14 in 2025. Annual growth reached 6.2% in 2022, moderated to 4.5% in 2024 and was 4.7% in 2025. The five-year record amounts to 5.2% annual growth. The latest 3.1% increase therefore continues the annual progression at a slower rate than the recent five-year pace.

Is the dividend covered?

The dividend consumes 61% of earnings. That payout ratio indicates that a majority of reported profit is distributed to shareholders while some earnings remain inside the company for research, acquisitions, debt service and other corporate needs. Coverage still depends on sustained earnings and cash generation across Innovative Medicine and MedTech.

SmarterDividends rates the dividend A, with a safety score of 89. That grade means very safe (score 80-100): current earnings coverage, the long record of increases and Johnson & Johnson’s business profile indicate a comparatively low risk of a reduction. The grade describes present coverage rather than guaranteeing future payments.

Yield and valuation

At a share price of $270.80, the $5.36 annual dividend produces a 1.99% forward yield. That is above the Healthcare sector median forward yield of 1.80%, although the difference is limited. An investor holding 100 shares would receive $536.00 in annual dividend income at the current rate before taxes.

SmarterDividends estimates fair value at $240.60 and assigns a fair valuation verdict, with 11% downside to that estimate. The valuation reading and the dividend yield measure different things: the former compares the share price with an estimated business value, while the latter measures annual cash income relative to the current price. The stock’s 43.0% one-year gain has reduced the yield available at the prevailing price.

What to watch

The immediate operating test is whether newer oncology, immunology and neuroscience products continue to offset STELARA’s decline from biosimilar competition. Investors can also track execution against the raised full-year outlook and performance in MedTech, where second-quarter operational growth trailed Innovative Medicine. These factors affect the earnings base supporting the 61% payout ratio.

Johnson & Johnson has scheduled an Enterprise Business Review for December 8, 2026, and its filings continue to identify the planned separation of the Orthopaedics business as a strategic undertaking. The separation did not cause this dividend increase, but its structure, timing and effect on the remaining company’s financial profile are relevant to future coverage. The company’s second-quarter Form 10-Q says it expects to continue paying regular quarterly cash dividends.