Dividend Aristocrats In Focus: Kenvue – Sure Dividend

Up to date on March thirteenth, 2025 by Nathan Parsh

The Dividend Aristocrats are 69 corporations within the S&P 500 Index which have raised their dividends for no less than 25 years in a row. Over the a long time, many of those corporations have turn out to be enormous multi-national firms.

You’ll be able to see the total record of all 69 Dividend Aristocrats right here.

We created a full record of all Dividend Aristocrats and essential monetary metrics like price-to-earnings ratios and dividend yields. You’ll be able to obtain your copy of the Dividend Aristocrats record by clicking on the hyperlink under:

Disclaimer: Certain Dividend just isn’t affiliated with S&P International in any method. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet is predicated on Certain Dividend’s personal evaluate, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s based mostly. Not one of the data on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official data.

Kenvue Inc. (KVUE) is a current addition to the Dividend Aristocrats record, having been spun off from former dad or mum firm Johnson & Johnson (JNJ) in 2023.

As a spin-off, Kenvue carries its former dad or mum 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 shopper 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 contains 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 comprises merchandise for girls’s well being, wound care, oral care, and child care.

Kenvue’s well-known manufacturers embrace 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 supplied steering for 2025 as properly. 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 increased 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 corporations within the market.

As we speak, Kenvue consists of simply the buyer merchandise companies, which have typically 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. Subsequently, we anticipate Kenvue to develop earnings-per-share by 3% yearly by way of 2030.

Johnson & Johnson’s dividend development streak of greater than six a long time is without doubt one of the longest within the market. Together with the corporate’s dividend enhance introduced final summer time, Kenvue has a dividend development streak of 62 years. This qualifies Kenvue as each a Dividend King and a Dividend Aristocrat.

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

Aggressive Benefits & Recession Efficiency

Kenvue’s former dad or mum firm Johnson & Johnson has confirmed to be one of the profitable corporations at navigating recessions.

Although Kenvue not advantages from its dad or mum firm’s diversification, we consider that it could show equally efficient at dealing with financial downturns.

Since Kenvue was a subsidiary of Johnson & Johnson in the course of the Nice Recession of 2008-2009, there isn’t a knowledge on its earnings-per-share efficiency throughout that point.

Nonetheless, traders can moderately infer that Kenvue would show an identical diploma of resilience throughout recessions as its former dad or mum firm.

The corporate’s merchandise, akin to Band-Assist and Tylenol, are wanted whatever the state of the economic system as they instantly have an effect on shoppers’ well being and well-being. As trusted merchandise, they wish to proceed to carry out properly even underneath opposed circumstances.

General, Kenvue ought to proceed to boost its dividend for a lot of extra years because of its low payout ratio, respectable recessions resilience, and wholesome steadiness sheet.

Valuation & Anticipated Returns

We anticipate Kenvue to generate adjusted earnings-per-share of $1.15 for 2025. Subsequently, shares of Kenvue at present commerce for a price-to-earnings ratio of 20.

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

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

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

Subsequently, if the inventory have been to succeed in our goal a number of by 2030, valuation may scale 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 by way of 2030.

Last Ideas

Kenvue is a comparatively new addition to the Dividend Aristocrats record. After a long time as a part of Johnson & Johnson, Kenvue turned an impartial entity in 2023.

Whereas we discover the legacy enterprise recession-resistant and the excessive dividend yield enticing for revenue traders, the whole return profile just isn’t 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 Certain Dividend databases include 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.

In the event you’re on the lookout for shares with distinctive dividend traits, take into account the next Certain Dividend databases:

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