Dividend Aristocrats In Focus: Kenvue

Up to date on March thirteenth, 2025 by Nathan Parsh

The Dividend Aristocrats are 69 firms within the S&P 500 Index which have raised their dividends for a minimum of 25 years in a row. Over the many years, many of those firms have change into large multi-national firms.

You possibly can see the total checklist of all 69 Dividend Aristocrats right here.

We created a full checklist of all Dividend Aristocrats and vital monetary metrics like price-to-earnings ratios and dividend yields. You possibly can obtain your copy of the Dividend Aristocrats checklist by clicking on the hyperlink under:

Disclaimer: Positive Dividend is just not affiliated with S&P World in any approach. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the data on this article or spreadsheet is official information from S&P World. Seek the advice of S&P World for official data.

Kenvue Inc. (KVUE) is a latest addition to the Dividend Aristocrats checklist, having been spun off from former guardian firm Johnson & Johnson (JNJ) in 2023.

As a spin-off, Kenvue carries its former guardian firm’s dividend development historical past, and is a Dividend Aristocrat.

This text will analyze Kenvue’s enterprise mannequin, future development catalysts, and anticipated returns.

Enterprise Overview

Kenvue operates within the healthcare sector as a client merchandise producer. In Could 2023, Kenvue was spun off from Johnson & Johnson. Now, Kenvue operates three segments: Self Care, Pores and skin Well being & Magnificence, and Important Well being.

Self-care’s product portfolio consists of cough, chilly, allergy, smoking cessation, and ache care merchandise, amongst others. Pores and skin Well being & Magnificence holds merchandise for the face, physique, hair, and solar.

Important Well being accommodates merchandise for girls’s well being, wound care, oral care, and child care.

Kenvue’s well-known manufacturers embody Tylenol, Listerine, Band-Assist, Neutrogena, Nicorette, and Zyrtec.

On February sixth, 2025, Kenvue reported fourth-quarter and full yr earnings outcomes.

Supply: Investor Presentation

Income decreased 0.1% to $3.66 billion, which was was $109 million lower than anticipated. Adjusted earnings-per-share totaled $0.26, which was down from $0.31 within the prior yr, however was in-line with estimates.

For the yr, income grew 0.1% to $15.5 billion whereas adjusted earnings-per-share of $1.14 in comparison with $1.29 in 2023.

Natural gross sales grew 1.7% for the quarter and 1.5% for the yr. Pricing and blend added 1% to quarterly gross sales development whereas quantity improved 0.7%. Pores and skin Well being & Magnificence and Self Care have been constructive for the quarter, however this was offset by weaker outcomes from important well being. The gross revenue margin expanded 80 foundation factors to 56.5%.

Kenvue offered steerage for 2025 as nicely. The corporate expects income development to be in a variety of -1.0% to 1.0% and adjusted earnings-per-share are projected to be larger by 2%. We anticipate that the corporate can earn $1.15 per share in 2025.

Progress Prospects

Previous to the spin-off, Johnson & Johnson produced annual earnings development of seven% from 2013 to 2022, as the corporate’s diversification allowed it to be one of many extra steady firms within the market.

Immediately, Kenvue consists of simply the buyer merchandise companies, which have usually produced the bottom development charges.

For its half, Kenvue administration expects the corporate to generate natural income development round 3%- 4% per yr over the long run. Due to this fact, we count on Kenvue to develop earnings-per-share by 3% yearly via 2030.

Johnson & Johnson’s dividend development streak of greater than six many years is likely one of the longest within the market. Together with the corporate’s dividend improve introduced final summer season, Kenvue has a dividend development streak of 62 years. This qualifies Kenvue as each a Dividend King and a Dividend Aristocrat.

We imagine that the penchant for dividend development is a part of Kenvue’s enterprise DNA.

Aggressive Benefits & Recession Efficiency

Kenvue’s former guardian firm Johnson & Johnson has confirmed to be probably the most profitable firms at navigating recessions.

Although Kenvue now not advantages from its guardian firm’s diversification, we imagine that it will show equally efficient at dealing with financial downturns.

Since Kenvue was a subsidiary of Johnson & Johnson through the Nice Recession of 2008-2009, there is no such thing as a information on its earnings-per-share efficiency throughout that point.

Nevertheless, buyers can moderately infer that Kenvue would show the same diploma of resilience throughout recessions as its former guardian firm.

The corporate’s merchandise, comparable to Band-Assist and Tylenol, are wanted whatever the state of the economic system as they straight have an effect on shoppers’ well being and well-being. As trusted merchandise, they wish to proceed to carry out nicely even beneath adversarial circumstances.

Total, Kenvue ought to proceed to boost its dividend for a lot of extra years due to its low payout ratio, first rate recessions resilience, and wholesome steadiness sheet.

Valuation & Anticipated Returns

We count on Kenvue to generate adjusted earnings-per-share of $1.15 for 2025. Due to this fact, shares of Kenvue presently commerce for a price-to-earnings ratio of 20.

For context, Johnson & Johnson shares have a median price-to-earnings ratio of near 19 since 2013.

Countering the truth that Kenvue holds a few of the industry-leading manufacturers and that its merchandise have been lower-margin companies throughout the guardian firm, we have now a goal price-to-earnings ratio of 14 for the inventory.

This means a future headwind from P/E a number of contraction.

Due to this fact, if the inventory have been to achieve our goal a number of by 2030, valuation might cut back annual returns by 6.9%. EPS development (estimated at 3% per yr) and the dividend yield will generate constructive returns.

On July twentieth, 2023, Kenvue introduced its first-ever quarterly dividend of $0.20 per share. The corporate raised its dividend 2.5% on July twenty fifth, 2024. The annualized payout of $0.82 per share represents a present yield of three.6%.

Placing all of it collectively, complete returns are anticipated to be simply 0.1% yearly via 2030.

Closing Ideas

Kenvue is a comparatively new addition to the Dividend Aristocrats checklist. After many years as a part of Johnson & Johnson, Kenvue turned an unbiased entity in 2023.

Whereas we discover the legacy enterprise recession-resistant and the excessive dividend yield enticing for earnings buyers, the overall return profile is just not excessive sufficient for a purchase or perhaps a maintain advice. As a result of valuation, we charge KVUE inventory as a promote.

Moreover, the next Positive Dividend databases comprise essentially the most dependable dividend growers in our funding universe:

• The Dividend Champions: Dividend shares with 25+ years of dividend will increase, together with these that will not qualify as Dividend Aristocrats.
• The Finest DRIP Shares: The highest 15 Dividend Aristocrats with no-fee dividend reinvestment plans.

If you happen to’re searching for shares with distinctive dividend traits, take into account the next Positive Dividend databases:

The main home inventory market indices are one other strong useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month: