We recently published a list of the 10 Best Dividend Monarchs to Invest in Now. In this article, we are going to take a look at where Johnson & Johnson (NYSE:JNJ) stands against other best dividend monarchs.

Dividend-focused investors are generally well-acquainted with terms like Dividend Aristocrats and Dividend Kings, but many may not be aware of a lesser-known group called Dividend Monarchs. While they fall under the broader category of dividend growth stocks, they carry a distinct title. The Dividend Monarchs Index highlights US companies that have managed to raise their dividends consistently for at least 50 consecutive years. These firms have weathered decades of market ups and downs, showcasing both resilience and steady performance in terms of dividend growth and stock returns. As an evolution of the well-known S&P Dividend Aristocrats Index Series, the S&P Dividend Monarchs Index sets an even higher standard, recognizing a more exclusive tier of long-term dividend payers.

S&P Dow Jones Indices has been a pioneer in dividend growth strategies since the 1980s, initially tracking US companies with at least 10 years of dividend increases. As the number of such companies grew, the threshold was raised to 25 years, forming the basis for the Dividend Aristocrats Index, launched in 2005. This index became a widely recognized benchmark, eventually expanding to include mid- and small-cap stocks as well as global markets. By April 2023, over $40 billion in ETF assets tracked these indices. With a rising number of companies now surpassing 50 consecutive years of dividend growth across different market caps, S&P introduced the Dividend Monarchs Index in 2023 to reflect this new elite group.

The key distinction between Dividend Kings and Dividend Monarchs lies in the inclusion criteria. While both require at least 50 consecutive years of dividend increases, Dividend Monarchs must also meet specific standards set by S&P. To qualify for the Dividend Monarchs Index, a company must be part of the Composite 1500, have a float-adjusted market capitalization of at least $2 billion, maintain a three-month average daily trading value of $5 million or more, and consistently grow its dividend over five decades. This added layer of eligibility makes Monarchs a more selective, index-based group.

Companies that meet the tough 50-year dividend growth requirement tend to show strong profitability and financial stability. According to an S&P Dow Jones Indices report dated April 30, 2023, the Dividend Monarchs Index outperformed both the broader market and the S&P Composite in terms of return on equity (ROE) and showed more consistent earnings. The report also noted that, based on back-tested data since January 31, 2018, the Dividend Monarchs Index displayed more defensive traits—offering lower volatility and smaller drawdowns than the S&P 500 during market declines.

Although the Dividend Monarchs Index is a relatively new concept with only five years of back-tested performance, it has grown significantly during that time, expanding from 11 to 35 constituents. Despite the index’s short history, the companies included have a track record of at least 50 consecutive years of dividend growth, dating as far back as 1972. According to data presented by S&P Dow Jones Indices, the performance of these companies—measured through both price returns over the past 50 years and total returns since December 1989—has generally outpaced that of the broader market. This suggests that many of the index’s constituents have delivered stronger long-term results. Given this, we will take a look at some of the best Dividend Monarchs to invest in.

A smiling baby with an array of baby care products in the foreground.

Our Methodology

For this list, we scanned the holdings of the S&P Dividend Monarchs Index, which tracks the performance of companies with 50 consecutive years of dividend growth. From that list, we picked 10 stocks that were most popular among hedge funds, as per Insider Monkey’s Q4 2024 database. The stocks are ranked in ascending order of the hedge funds having stakes in them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 98

Johnson & Johnson (NYSE:JNJ) is an American healthcare company that specializes in manufacturing, developing, and selling a wide range of healthcare products and also offers related services. In the fourth quarter of 2024, the company posted a revenue of $22.5 billion, up 5.2% from the previous year and beating estimates by $84.4 million. Operational growth came in at 6.7%, with the MedTech segment seeing a 6.2% increase in global operational sales, helped by both acquisitions and divestitures.

Although Johnson & Johnson (NYSE:JNJ)’s pharmaceutical segment hasn’t been impacted by current tariffs, its recent effort to resolve talc-related lawsuits through bankruptcy was turned down by a judge. As a result, the company now intends to address the lawsuits through the traditional tort system after courts found the cases don’t cause significant financial strain.

Despite the unresolved legal issues, Johnson & Johnson (NYSE:JNJ) continues to show strong financial health and steady performance. Both its pharmaceutical and MedTech businesses remain solid, backed by reliable earnings and a productive pipeline that consistently brings new product approvals. With more than a hundred years of innovation under its belt, Johnson & Johnson appears well-positioned to keep moving forward.

On April 15, Johnson & Johnson (NYSE:JNJ) declared a 4.8% increase in its quarterly dividend to $1.30 per share. Through this increase, the company stretched its dividend growth streak to 63 years, which makes JNJ a Dividend Monarch to monitor. The stock’s dividend yield on April 15 came in at 3.23%.

Overall, JNJ ranks 1st on our list of the best Dividend Monarchs to invest in. While we acknowledge the potential of JNJ as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than JNJ but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.