Dividend Battle: Procter & Gamble Vs. Johnson & Johnson

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Includes: JNJ, PG
by: Intelligent Speculator

We looked at several of the best dividend stocks out there and two that seemed like natural fits to face each other were Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ), two of the bigger consumer staples names out there, two of the most stable, consistent and reliable companies that do well no matter how the U.S. economy performs. Both could certainly be held in a dividend portfolio but chances are that you would be choosing between them. So the matchup makes a lot of sense and we will be using the top 20 things that we look for in dividend stocks mostly and also consider their sustainability (both would likely not have any issues there). Without further wait, let’s get started:

Dividend Metrics

Ticker Name Current Dividend Yield 5 year Dividend Growth 1 year Dividend Growth
JNJ Johnson & Johnson 3.54 9.5 7.77
PG Procter & Gamble Co/The 3.23 6.21 9.22

Johnson & Johnson


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Procter & Gamble


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I think that while both have very interesting profiles, JNJ’s higher yield and higher 5 year dividend growth are enough for to call them a winner in this section. That being said, both stocks qualify as dividend aristocrats thanks to their impressive long term dividend payouts.

Company Metrics

Ticker Name Sales Growth (1 year) Sales Growth (5 year) Earnings growth P/E ratio Margins growth Payout ratio Return on Equity Debt to Capital Ratio
JNJ Johnson & Johnson -0.5 3.98 4.95 13.15 -0.78 43.54 24.88 0.11
PG Procter & Gamble Co/The 4.59 3.57 10.54 16.44 -0.32 46.82 18.69 0.18

Another very difficult pick but I will have to side with PG on this one, mostly because of its higher sales and earnings growth. Earlier this week, JNJ announced that while sales increased a bit, margins got worse resulting in net income dropping 6.4% mostly because of generics cutting into sales of a few of its products. Most of the other numbers are comparable but sales and earnings growth will make a big difference in long term dividend growth.

Stock Metrics

Ticker Name Trend Analysis Price Trading Volume
JNJ Johnson & Johnson -65 64.42 12061256
PG Procter & Gamble Co/The 90 64.92 10544849

Johnson & Johnson


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Procter & Gamble


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Industry Metrics

The fact that Johnson & Johnson has exposure to pharmaceuticals makes it somewhat different from Procter & Gamble in the fact that it depends on patents for some of its sales and as those expire, sales do end up declining a bit like they did in the most recent quarter. As for their other activities I think both companies are fairly similar in the fact that they own very strong brands in industries that are very resistant to fluctuations in the economy. Both continue to spend important amounts in marketing to solidify their leading positions thus reinvesting to ensure their long term future.

Fit Within Your Portfolio And Sustainability

While both stocks would clearly be great choices, I would personally tend to stick with Procter & Gamble over Johnson & Johnson and could easily have included one or both in the Ultimate Sustainable Dividend portfolio. Do you agree?

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