The healthcare sector is loaded with great dividend stocks.

This should not come as a surprise, since healthcare stocks are stable, and generate reliable profits each year.

With their consistent earnings growth, healthcare stocks can pay high dividend yields to shareholders. And, they can raise their dividend payouts regularly.

Johnson & Johnson (JNJ) and Pfizer (PFE) both have dividend yields well above the 2% average yield of the S&P 500 Index. They both have paid dividends for decades on end.

J&J also holds the distinction of being a Dividend Aristocrat, a group of 51 companies in the S&P 500 with 25+ years of consecutive dividend increases.

This article will discuss which of the two stocks is the better dividend investment right now.

Business Overview

Winner: J&J

J&J and Pfizer have adopted different business models.

J&J has large business across the healthcare spectrum, including pharmaceuticals, medical devices, and consumer health products.

Source: 4Q Earnings Presentation, page 1

J&J is more diversified than Pfizer. It has a huge consumer products segment, with many strong brands including Listerine, Band-Aid, Tylenol, and Neutrogena.

All three businesses contributed to J&J’s solid performance in 2016.

Meanwhile, Pfizer is virtually a pharmaceutical pure-play. Its biggest segment is Innovative Health, which represents more than half of overall sales.

This segment includes Pfizer’s flagship pharmaceutical drugs Ibrance, Eliquis, and Xtandi.

Source: 2016 Earnings Presentation, page 14

J&J’s consumer healthcare segment accounted for 19% of its sales last year. Pfizer’s consumer business represented just 6% of its 2016 revenue.

Having a large consumer business helps J&J when the pharmaceutical industry struggles, such as last year. Consumer healthcare products are more stable than pharmaceuticals.

J&J’s consumer business posted a 4.9% increase in fourth-quarter sales, which was above the company-wide growth rate of 1.7% for the quarter.