Johnson & Johnson Outshines Abbott Laboratories as Dividend King
Two healthcare giants, Abbott Laboratories (ABT) and Johnson & Johnson (JNJ), are Dividend Kings that have raised their payouts for at least 50 consecutive years. While both companies have impressive dividend track records, one of them is performing better than the other right now.
Johnson & Johnson has been doing well this year, with revenue and earnings growth continuing to rise. The company has also made significant progress in its pipeline, including earning approval for Icotyde, a new oral drug that targets the IL-23 receptor, and clearing the Ottava robotic-assisted surgery system for use. Additionally, Johnson & Johnson recently received a major win in its talc-based products lawsuit.
On the other hand, Abbott Laboratories has faced several challenges, including revenue and earnings growth that haven't been strong, particularly in its diagnostics and nutrition segments. The company has also dealt with legal and regulatory headwinds, including lawsuits claiming that its baby formula caused health issues in premature babies. However, Abbott is looking to turn things around, thanks to its core medical device segment and recent acquisition of Exact Sciences.
Despite these challenges, both companies are excellent picks for long-term income seekers. Johnson & Johnson's dividend track record is stronger, with 64 consecutive years of annual increases compared to 54 for Abbott. However, Johnson & Johnson trades at a higher price-to-earnings ratio than Abbott, which may be due to its stronger underlying business and better prospects.