$JNJ: Dividend King or Lawsuit Trap?

Johnson & Johnson (NYSE: JNJ) at $188 yields just 2.8%. That’s less than Treasuries at 4.1%【1】 and below AbbVie at 4.2%【2】. For dividend investors, that’s not safety — that’s a warning sign. Add in $10–15 billion of talc lawsuits with no end date【3】, and you’re paying a premium to hold somebody else’s legal baggage.

The Math Doesn’t Lie

• JNJ yield: 2.8%
• 10-Year Treasury: 4.1% (risk-free)【1】
• AbbVie yield: 4.2% (no talc overhang)【2】

Paid less. Taking more risk. Explain that math.

The Lawsuit That Won’t Go Away

In early 2025, JNJ reversed $7 billion in reserves after courts threw out its “Texas two-step” bankruptcy trick【4】. Translation: no shield, no escape.

This isn’t background noise. Bayer’s Roundup battle cost $10.9 billion over four years【5】. 3M’s PFAS disaster is still bleeding $10–12 billion【6】. JNJ is staring at tens of thousands of suits, billion-dollar jury verdicts, and no clear end.

The Patent Cliff

Stelara loses exclusivity in 2027 — $6–7 billion in sales gone【7】, about $1.50 a share. The Inflation Reduction Act cuts another $1–2 per share【8】. Add $2–3 billion a year in settlements. That’s not “printing money.” That’s draining it.

The Valuation Trap

JNJ trades at 17× forward earnings. AbbVie trades at 14× with a higher yield【2】. The market is assuming a neat $10B settlement by 2027【3】. If it drags to 2030 or hits $15B+, that multiple cracks. At $186, the premium is a gift — to sellers.

Bulls Will Say…

“JNJ survived opioids. JNJ survived mesh.”【9】 True. But those were $2–5 billion checks with defined endpoints.

Talc is different. Bigger, messier, open-ended. Bulls hiding behind the dividend track record aren’t analyzing — they’re hoping.

Carvykti, JNJ’s CAR-T therapy, could add $3–5 billion by 2028【10】. Fine. But that growth is already in the price. The real question: are you being paid for the risk?

Scenarios

• Base case: $10B by 2027 → stock stuck $175–185, you collect a 2.8% dividend. Boring.
• Bear case: $15B+ into 2030 → stock reprices $150–165. Ugly.
• Bull case: quick sub-$10B settlement + Carvykti ramp → maybe $190–200. Thin odds.

The Call

At $186, you’re not getting rewarded. You’re underwriting hope. At $165, with a 3.1–3.3% yield, maybe you’re paid to wait.

Your Turn

So which camp are you in? Dividend King believer, or Lawsuit Trap realist?

Holding JNJ? Buying the dip? Avoiding entirely? Tell me why I’m wrong.

Drop your take below — prove me wrong.

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References

1. U.S. Treasury Yield Curve, October 2025 – Schwab Market Data.
2. AbbVie Equity Research Report – Morningstar, September 2025.
3. Johnson & Johnson Equity Research Update – Argus Research, September 2025.
4. U.S. Bankruptcy Court Ruling on LTL Management (Texas Two-Step), Jan 2025.
5. Bayer AG Annual Report 2022 – Litigation Settlements (Roundup).
6. 3M PFAS Settlement Updates – Bloomberg, Aug 2025.
7. Stelara Patent Expiry – JNJ SEC Filings, Q2 2025 10-Q.
8. Inflation Reduction Act Impact – Schwab Equity Outlook, Jul 2025.
9. JNJ Litigation History (Opioids, Mesh) – Morningstar Healthcare Sector Review, 2024.
10. Carvykti Pipeline Growth – Argus Healthcare Research Note, Sep 2025.