Dividend stocks attract income-focused investors due to their consistent and dependable payouts. However, not all dividend stocks offer the same benefits. A select group of companies, known as Dividend Kings, have increased their dividends for an impressive 50 consecutive years. Among these elite companies are healthcare giant Johnson & Johnson (JNJ) and consumer goods leader Procter & Gamble (PG), showcasing the strength and stability of their business models.

Their latest quarterly earnings highlight their resilience and adaptability in a constantly changing market, reinforcing their commitment to shareholders. Beyond their dependable dividend payouts, both companies present opportunities for capital growth, with Wall Street projecting substantial upside potential in 2025. Let’s dive into why these two Dividend Kings deserve a spot in your portfolio. 

Dividend Stock #1: Johnson & Johnson

Founded in 1886, Johnson & Johnson is a multinational healthcare and pharmaceutical giant. In 2023, the company spun off its consumer segment into a standalone entity named Kenvue (KVUE), which includes well-known brands like Band-Aid, Tylenol, and Neutrogena. This strategic move enabled J&J to concentrate on its higher-margin pharmaceuticals and medical devices divisions, reflecting a shift toward innovation-driven growth.

J&J has also partnered with tech giant Nvidia (NVDA) to leverage AI models to enhance its MedTech segment. Last year, J&J stock declined by 9.6%, while the S&P 500 Index ($SPX) gained 24%. However, the stock has rebounded slightly, rising 5.7% so far this year.

In the fourth quarter of 2024, Johnson & Johnson reported that operational sales rose by 6.7% year-over-year, although its adjusted earnings declined by 10.9%. For the full year, however, the company posted a 0.6% increase in earnings and a 5.9% rise in sales. The MedTech segment delivered $31.9 billion in sales, reflecting 4.8% year-over-year growth. Notably, the company introduced 15 new products within this segment during 2024. Furthermore, by leveraging NVIDIA’s IGX edge computing platform and Holoscan edge AI platform in its surgical suites, Johnson & Johnson is well-positioned for significant growth in its MedTech segment in the years ahead. 

As a Dividend King, J&J has raised its dividend for over 62 consecutive years. The company offers a forward dividend yield of 3.4%, well above the healthcare sector average of 1.58%. With a current dividend payout ratio of 44.8%, there is ample room for future dividend increases. At the end of 2024, J&J held $25 billion in cash and marketable securities, alongside $37 billion in total debt. However, with $20 billion in free cash flow generated during the year, the company is positioned to reduce its debt burden effectively. In 2024, J&J returned $11.8 billion to shareholders through dividends.

Analysts project Johnson & Johnson’s earnings to grow by 5.6% in both 2025 and 2026. At present, JNJ stock trades at 13 times its estimated 2025 earnings, significantly below its five-year historical average price-to-earnings (P/E) ratio of 23.9x. 

What Do Analysts Say About JNJ Stock?

On Wall Street, JNJ stock holds an overall rating of “Moderate Buy.” Among the 21 analysts covering the stock, seven rate it as a “Strong Buy,” two as a “Moderate Buy,” and 12 recommend holding. The stock’s average target price of $170.14 suggests potential upside of 15.8% from current levels, while the highest price estimate of $190 indicates a possible 29.4% rally over the next 12 months.

Dividend Stock #2: Procter & Gamble

With a market capitalization of $386.5 billion, Procter & Gamble is a global powerhouse in the consumer goods industry. Its extensive portfolio of iconic brands, including Tide, Pampers, Gillette, and Crest, has cemented its presence in households worldwide. This diversification and strong brand loyalty have contributed to the company’s stability and its impressive track record of consistent dividend payments and increases. Remarkably, P&G has raised its dividends for 68 consecutive years. Last year, P&G stock rose 12.7% compared to the broader market gain. 

P&G offers a forward dividend yield of 2.4%, exceeding the consumer staples sector average of 1.89%. Its forward payout ratio of 54.5% indicates that the company can maintain its dividend payments while retaining sufficient earnings for reinvestment and future dividend growth.

In the second quarter of fiscal 2025, P&G’s net sales grew by 2%, driven by strong performance in the baby, feminine, and family care segments, with all other segments showing growth except for the beauty segment, which remained flat. The company’s GAAP net earnings per share increased by 34% year-over-year. P&G converted 84% of its adjusted earnings into free cash flow (FCF), distributing $2.4 billion in dividends and executing $2.5 billion in share repurchases during the quarter.

For fiscal 2025, P&G projects net earnings growth of 10% to 12%, surpassing fiscal 2024 EPS of $6.02 and outpacing analysts’ consensus estimate of 5.2% growth. Additionally, P&G expects to convert 90% of its full-year earnings into free cash flow and plans to return $10 billion in dividends and $6 billion to $7 billion through share repurchases to shareholders over the year.

Analysts also forecast a 6.2% earnings increase for fiscal 2026. Currently, PG stock trades at 22 times its estimated 2026 earnings, significantly below its five-year historical average price-to-earnings (P/E) ratio of 33.8x. 

What Do Analysts Say About PG Stock?

On Wall Street, Procter & Gamble stock is an overall “Moderate Buy.” Of the 26 analysts who cover the stock, 15 rate it as a “Strong Buy,” two recommend a “Moderate Buy,” and nine suggest a “Hold.” The average target price of $181.72 indicates upside potential of 10.7% from current levels. Further, its high price estimate of $209 suggests the stock can rally as much as 27.3% over the next 12 months.