Johnson & Johnson Outperforms Abbott Laboratories as Dividend King

Investors seeking stable dividend stocks often turn to Dividend Kings, companies that have raised their payouts for at least 50 consecutive years. Among this group, Abbott Laboratories (ABT) and Johnson & Johnson (JNJ), both healthcare giants, stand out. However, while both are solid choices, they've performed differently this year: J&J has beaten broader equities, whereas ABT has been a market laggard.

Abbott's recent challenges include weak revenue and earnings growth in its diagnostics and nutrition segments, as well as legal and regulatory hurdles. For instance, the company faced lawsuits claiming that its baby formula caused health issues in premature babies, which negatively impacted its public image. However, Abbott is working to turn things around by focusing on its core medical device segment, particularly its diabetes care unit, where its FreeStyle Libre continuous glucose monitoring systems continue to perform well.

In addition, Abbott acquired Exact Sciences earlier this year for $21 billion, adding Cologuard, a leading non-invasive diagnostic test for colorectal cancer, to its portfolio. This deal will help the company tap into the large and growing cancer diagnostic market and boost sales within its diagnostic division. Meanwhile, ABT's dividend program remains intact, having increased payouts for 54 consecutive years.

J&J, on the other hand, has been firing on all cylinders. Despite facing challenges due to government-led drug price negotiations and losing patent exclusivity for Stelara in 2025, the company has seen revenue and earnings growth. J&J is poised to generate over $100 billion in sales this year, a milestone that few biopharmaceutical companies have achieved.