Dividend Kings In Focus: Kenvue

Updated on July 15th, 2025 by Nathan Parsh

The Dividend Kings are an illustrious group of companies. They stand apart from the vast majority of the market because they have raised dividends for at least 50 consecutive years.

We believe that investors should view the Dividend Kings as the highest-quality dividend growth stocks to buy for the long term.

With this in mind, we created a full list of all the Dividend Kings. You can download the full list, along with important financial metrics such as dividend yields and price-to-earnings ratios, by clicking the link below:

This group is so exclusive that there are only 55 companies that qualify as Dividend Kings.

Kenvue Inc. (KVUE) is one of the more recent additions to the Dividend Kings list, having been spun off from its former parent company, Johnson & Johnson (JNJ).

This article will analyze Kenvue’s business model, identify its future growth catalysts, and outline expected returns.

Business Overview

Kenvue operates in the healthcare sector as a consumer products manufacturer. In May 2023, Kenvue was spun off from Johnson & Johnson. Now, Kenvue operates three segments: Self Care, Skin Health and Beauty, and Essential Health.

Self Care’s product portfolio includes cough, cold, allergy, smoking cessation, and pain care products, among others. Skin Health and Beauty offers a range of products, including face, body, hair, and sun care. Essential Health contains products for women’s health, wound care, oral care, and baby care.

Kenvue’s well-known brands include Tylenol, Listerine, Band-Aid, Neutrogena, Nicorette, and Zyrtec. These businesses contributed approximately 17% of Johnson & Johnson’s annual revenue.

Kenvue reported first-quarter results on May 8th, 2025.

Source: Investor Presentation

Net sales declined 3.9% to $3.74 billion, while adjusted earnings per share of $0.24 compared unfavorably to $0.28 in the prior year. However, both results were better than what the market had expected.

Organic revenue fell 1.2% while currency exchange reduced results by 2.7%. Self Care grew 0.3% due to market share gains across the portfolio, with pronounced strength in Allergy, Digestive Health, and Smoking Cessation. Weaker results in the Cold, Cough, and Flu segment offset these gains. Skin Health & Beauty declined by 4.8% due to the loss of club channel rotations in the U.S., destocking in China, and lower demand for sun products in Latin America. Essential Health was unchanged as demand in Wound Care was offset by weakness in Women’s Health and Oral Care.

Even with weaker results, the gross profit margin improved by 40 basis points to 58%, while the operating margin expanded by 80 basis points to 14.9%. The adjusted gross margin contracted 20 basis points to 60.0% while the adjusted operating margin fell 220 basis points to 19.8%. These declines were due to currency exchange, brand investment, and inflationary headwinds.

For the full year 2025, Kenvue expects net sales to be in a range of +1% to +3%, up from the previously reported range of -1% to +1%. Adjusted earnings per share are expected to be flat for the period.

Growth Prospects

Johnson & Johnson reported annual earnings growth of 7% from 2013 to 2022, thanks to the company’s diversification, which enabled it to remain one of the more stable companies in the marketplace. Kenvue consists solely of consumer products businesses, which often produce the lowest levels of growth. Therefore, we expect Kenvue to grow its earnings per share by 3% annually through 2029.

Johnson & Johnson has achieved 60 consecutive years of dividend growth, one of the longest streaks in the market. The company is both a Dividend King and a Dividend Aristocrat. We believe that Kenvue’s penchant for dividend growth is in its business DNA.

Competitive Advantages & Recession Performance

Kenvue’s former parent company, Johnson & Johnson, has proven to be one of the most successful companies at navigating recessions. Though Kenvue no longer benefits from its parent company’s diversification, we believe that it would prove equally effective at handling economic downturns.

Since Kenvue was a subsidiary of Johnson & Johnson during the Great Recession of 2008-2009, there is no data on its earnings-per-share performance during that time. However, investors can reasonably infer that Kenvue would display a similar degree of resilience during recessions as its former parent company.

The company’s products, such as Band-Aid and Tylenol, are needed regardless of the state of the economy, as they directly affect consumers’ health and well-being. As trusted products, they aim to continue performing well even under adverse conditions.

Overall, Kenvue should continue to raise its dividend for many years to come, thanks to a reasonable payout ratio, decent recession resilience, and a healthy balance sheet.

Valuation & Expected Returns

We expect Kenvue to generate adjusted earnings per share of $1.14 for 2025. Therefore, Kenvue shares currently trade for a price-to-earnings ratio of 18.6. For context, Johnson & Johnson shares have had an average price-to-earnings ratio of close to 19 since 2013.

Countering the fact that Kenvue holds some of the industry-leading brands and that its products were lower-margin businesses within the parent company, we have a target price-to-earnings ratio of 14 for the stock. This implies a headwind from multiple contractions.

Therefore, if the stock were to reach our target multiple by 2030, valuation could reduce annual returns by 5.5%. EPS growth (estimated at 3% per year) and the dividend yield (3.9%) are expected to generate positive returns.

Putting it all together, total returns are expected to reach 2.1% per year through 2029. This is not a solid anticipated rate of return, making the stock a hold.

Final Thoughts

Kenvue is a new addition to the Dividend Aristocrats list. After decades as part of Johnson & Johnson, Kenvue became an independent entity. As such, the company has produced decent results.

While we find the legacy business recession-resistant and the high dividend yield attractive for income investors, the total return profile is not sufficiently high to warrant a buy recommendation. We rate KVUE stock a hold.

Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:

The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.

If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: