What Is Considered a Good Stock Dividend? 2 Healthcare Stocks That Fit the Bill.
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The Motley Fool

What Is Considered a Good Stock Dividend? 2 Healthcare Stocks That Fit the Bill.

July 23, 2025
04:00 AM
4 min read
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stocksfinancialhealthcaremarket cyclesseasonal analysismarketdata analysis

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Research suggests that What makes a good dividend stock. The answer depends a bit on who's looking, of course. But there are some general themes that can be drawn out...

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4 min read

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investment

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Published

July 23, 2025

04:00 AM

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The Motley Fool

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Key Topics
stocksfinancialhealthcaremarket cyclesseasonal analysismarketdata analysis

Re suggests that What makes a good dividend stock

The answer depends a bit on who's looking, of course

But there are some general themes that can be drawn out by looking at Johnson & Johnson (JNJ -0, in today's financial world. 74%) and Medtronic (MDT 0

Moreover, Here's what you need to know, and why these two stocks fit the bill, in light of current trends

Johnson & Johnson is a Dividend King One key theme that runs through the two examples here is consistency

On that score, Johnson & Johnson has the best track record, with over six decades' worth of annual dividend increases, in this volatile climate

It's a member of the highly elite group of companies known as Dividend Kings

Image source: Getty Images (fascinating analysis), in today's market environment

Conversely, That alone isn't enough to make J&J worth buying, in light of current trends

It also happens to have a large and generally well-positioned, diversified across medical devices and pharmaceuticals

Re and development (R&D) and marketing are also major strengths for this industry-leading, in light of current trends

All of that is still not enough to make Johnson & Johnson worth buying

The final piece of the story is the dividend yield, currently 3, considering recent developments

That compares favorably to the 1

Meanwhile, 3% yield of the S&P 500 (^GSPC 0

In contrast, 40%) index and the roughly 1. 8% yield of the average healthcare stock

Moreover, It also happens to be near the high end of its historical yield range, which hints that J&J is attractively priced today

The blem is that Johnson & Johnson is dealing with a huge class-action lawsuit over talcum powder that will eventually be resolved, but that has also left investors in something of an information deficit

Some won't want to step aboard until this period of uncertainty is over, given that management can't talk the suit in any detail

However, for investors who can handle a bit of uncertainty, J&J has all the hallmarks of a good dividend stock

Medtronic is closing in on Dividend King Medtronic has increased its dividend annually for 48 consecutive years, which is two years shy of the 50 needed to be named a Dividend King

The data indicates that company is one of the largest medical device makers on the planet (which is quite significant), given current economic conditions

Johnson & Johnson, Medtronic has impressive R&D and marketing chops and is a key supplier to the healthcare industry

Medtronic's dividend yield is roughly 3. 2%, which is attractive relative to the broader market and the broader healthcare sector

It also happens to be near the high end of the stock's historical yield range, suggesting the device maker is attractively priced today

As with Johnson & Johnson, there's a reason for Medtronic's high yield (remarkable data), given the current landscape

In this case, Medtronic had a period where R&D wasn't ducing new innovations, and growth has slowed recently

Those two factors appear to be changing: New ducts are finally coming to market (innovation tends to be lumpy, so this is actually normal), and management is reworking the to focus on its most fitable and strongest-growing lines, considering recent developments

Moreover, In contrast, If Johnson & Johnson's legal black box is too much for you, Medtronic will bably be much more attractive (something worth watching)

Nevertheless, Balancing the good and bad with dividends You can easily find great dividend stocks, but they often have low yields because Wall Street is well aware of their success, amid market uncertainty

To be a good dividend stock usually also requires the yield to be attractive, which is the case with both Johnson & Johnson and Medtronic

That said, high-yield stocks usually have something them that looks a blem

Whether or not such a stock is good for your dividend portfolio will ly depend on the blem

For Johnson & Johnson, the big unknown is the lawsuit, which may put off some investors, considering recent developments

At the same time, For Medtronic, the issue is slow growth, a dynamic that appears set to change

Moreover, Both are good companies with above-average yields

Which one is a good dividend stock for you will depend on the amount of uncertainty you can handle, in today's financial world.