While the technology sector faces a renewed wave of volatility driven by artificial intelligence (AI) scare trades and valuation concerns, a different story is unfolding in the healthcare sector. Investors fleeing the jittery price swings of high-growth tech stocks are finding shelter in a familiar name that is quietly outperforming. Johnson & Johnson (NYSE: JNJ) is trading near all-time highs of approximately $245 per share, creating a divergence that has caught Wall Street's attention.
This rally defies the common perception of the healthcare giant as a slow-moving, boring stock. Over the last 30 days, shares have climbed approximately 14%, significantly outperforming the broader market during a period of uncertainty. This price action suggests that institutional money is rotating out of riskier assets and placing a premium on stability, reliable cash flow, and operational execution.
For investors watching the ticker today, Feb. 24, 2026, it is important to note a specific calendar event. Today is the ex-dividend date for Johnson & Johnson. This means the stock price will likely decline by the amount of the upcoming dividend payment, $1.30 per share. This is a mechanical market adjustment, not a reflection of business performance or a sell-off. For income-focused investors, this technical dip often represents an attractive entry point rather than a signal to exit.
64 Years of Unbroken Growth
The primary argument for holding Johnson & Johnson during turbulent market cycles revolves around its immense financial stability and its role as a portfolio stabilizer. The company belongs to an elite group of equities known as Dividend Kings. These are companies that have increased their dividend payout for at least 50 consecutive years.
Johnson & Johnson has now raised its dividend for 64 consecutive years, a track record that spans multiple recessions, market crashes, and geopolitical conflicts. This reliability is a rare commodity in a market fixated on speculative growth.
Currently, the stock yields approximately 2.12%, based on an annual payout of $5.20 per share. While higher yields can be found in the bond market or riskier sectors, the appeal here is the combination of growth and safety. The dividend is protected by a massive liquidity cushion. Management projects free cash flow to reach approximately $21 billion in 2026. This level of cash generation acts as a shield, ensuring the company can continue to pay shareholders, invest in research, and manage legal expenses without incurring heavy borrowing.
For risk-averse investors, the most compelling metric might be the stock's Beta. Beta measures how much a stock moves compared to the overall market (S&P 500). A Beta of 1.0 means the stock moves in lockstep with the market. Johnson & Johnson currently holds a Beta of just 0.35. This means the stock is historically 65% less volatile than the broader market. When tech stocks swing wildly, J&J tends to hold its ground. Adding JNJ to a portfolio heavy in technology acts as a mathematical shock absorber, dampening overall volatility while still providing equity exposure.
Beyond the Patent Cliff: The Road to $100 Billion
A common misconception about safe stocks is that they do not grow. Johnson & Johnson is currently disproving this theory with a strategic pivot that is paying off. Management has issued strong guidance for 2026, projecting full-year revenue to cross the $100 billion threshold for the first time in the company's history. Alongside this revenue milestone, the company anticipates an adjusted earnings per share (EPS) of approximately $11.53.
This growth is driven by a successful reinvention of its pharmaceutical division, now branded as Innovative Medicine. For years, investors worried about the patent cliff facing Stelara, a blockbuster immunology drug that lost its exclusivity protection in 2025. Typically, when a top drug faces generic competition, revenue collapses. However, J&J has successfully absorbed this decline through the meteoric rise of new blockbuster drugs.
Two key assets are driving this resilience:
- Darzalex: This oncology powerhouse is generating approximately $14 billion in annual sales. It has cemented the company's leadership in treating multiple myeloma, becoming a foundational therapy in oncology wards worldwide.
- Tremfya: Positioned as the successor to Stelara, Tremfya recently released strong three-year data regarding remission rates for Ulcerative Colitis. This clinical success is crucial, as it proves the company can retain its market share in the competitive immunology space even as its older drugs fade.
The Tech in MedTech: High-Margin Technologies
The growth story extends beyond pharmaceuticals into the MedTech (medical technology) division. This segment has undergone a significant transformation to focus on high-growth, high-margin technologies. A prime example is the successful integration of Shockwave Medical, acquired to modernize the cardiovascular portfolio.
Shockwave utilizes intravascular lithotripsy (IVL) technology. In simple terms, it uses sonic pressure waves to safely break up calcified plaque in arteries, similar to how kidney stones are treated. This is a massive upgrade over traditional angioplasty balloons. By owning this technology, Johnson & Johnson has secured a high-growth asset that complements its existing heart pump (Abiomed) and surgical businesses.
Furthermore, the company is making strides in robotics. The submission of its Ottava robotic surgical system for FDA approval signals an intent to compete directly in the rapidly expanding soft-tissue robotics market. These high-tech devices carry higher profit margins and create sticky relationships with hospital systems, providing a long-term earnings tailwind that goes beyond selling bandages or basic surgical tools.
Addition by Subtraction: The Orthopedics Strategy
To maintain this growth trajectory and improve margins, management is actively reshaping the corporate structure. A major development is the potential separation of the DePuy Synthes orthopedics business. Originally planned as a spin-off, recent reports indicate the company is exploring a mega sale of the asset.
Divesting the orthopedics unit represents a classic example of an addition-by-subtraction strategy. Orthopedics is a mature, lower-growth business compared to the booming fields of oncology drugs and heart recovery pumps. By shedding this slower unit, Johnson & Johnson improves its overall revenue growth rate and profit margins. Furthermore, a sale would generate a significant lump-sum cash payment, potentially billions of dollars, providing additional capital for acquisitions or share buybacks.
Addressing legal risks is essential for any balanced analysis of Johnson & Johnson. The company continues to face litigation over talc products, with a recent $1.5 billion verdict keeping the issue in the headlines. Additionally, a new commercial lawsuit from Bayer regarding marketing claims for prostate cancer drugs has added a layer of noise to the news cycle.
However, the stock’s recent rally suggests that the market is looking past these headlines. The prevailing view among bulls is that Johnson & Johnson has the financial depth to manage these liabilities without disrupting its business. With over $20 billion in cash and marketable securities, the potential proceeds from an orthopedics sale, and $21 billion in annual free cash flow, the company has a financial fortress capable of absorbing legal settlements. This financial strength ensures that legal battles remain a line item on the balance sheet rather than an existential threat to the dividend or operations.
Capital Preservation With Upside
Johnson & Johnson has successfully evolved from a slow-moving conglomerate into a focused, high-tech healthcare machine. By shedding its consumer health division (Kenvue (NYSE: KVUE)) and potentially its orthopedics unit, the company is streamlining its operations to focus entirely on high-growth opportunities in pharmaceuticals and medical technology.
While the stock is no longer a bargain-bin value play, trading near all-time highs, it offers a premium blend of capital preservation and growth that is difficult to find elsewhere. The combination of a 64-year dividend growth streak, a remarkably low volatility profile, and a clear path to $100 billion in revenue makes it a compelling option for 2026. For investors exhausted by the unpredictability of the technology sector, Johnson & Johnson proves that in the current market environment, boring can be incredibly beautiful and profitable.
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The article "Boring Is Beautiful: Why Johnson & Johnson Is Beating the Tech Sector" first appeared on MarketBeat.
