Dividend Aristocrats In Focus: Kenvue

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 not less than 25 years in a row. Over the many years, many of those corporations have develop into big multi-national companies.

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

We created a full checklist of all Dividend Aristocrats and essential 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: Certain Dividend is just not affiliated with S&P World in any means. S&P World owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain 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 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 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 mum or dad firm Johnson & Johnson (JNJ) in 2023.

As a spin-off, Kenvue carries its former mum or dad firm’s dividend progress historical past, and is a Dividend Aristocrat.

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

Enterprise Overview

Kenvue operates within the healthcare sector as a shopper merchandise producer. In Might 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 incorporates merchandise for ladies’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 12 months 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 12 months, however was in-line with estimates.

For the 12 months, 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 12 months. Pricing and blend added 1% to quarterly gross sales progress whereas quantity improved 0.7%. Pores and skin Well being & Magnificence and Self Care had 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 steerage for 2025 as effectively. The corporate expects income progress to be in a spread of -1.0% to 1.0% and adjusted earnings-per-share are projected to be greater by 2%. We anticipate that the corporate can earn $1.15 per share in 2025.

Development Prospects

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

Right now, Kenvue consists of simply the patron merchandise companies, which have usually produced the bottom progress charges.

For its half, Kenvue administration expects the corporate to generate natural income progress round 3%- 4% per 12 months over the long run. Due to this fact, we anticipate Kenvue to develop earnings-per-share by 3% yearly via 2030.

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

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

Aggressive Benefits & Recession Efficiency

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

Although Kenvue now not advantages from its mum or dad 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.

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

The corporate’s merchandise, comparable to Band-Assist and Tylenol, are wanted whatever the state of the financial system as they immediately have an effect on customers’ well being and well-being. As trusted merchandise, they wish to proceed to carry out effectively even below antagonistic 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 anticipate Kenvue to generate adjusted earnings-per-share of $1.15 for 2025. Due to this fact, shares of Kenvue at present 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 number of the industry-leading manufacturers and that its merchandise had been lower-margin companies inside the mum or dad firm, now we have 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 had been to achieve our goal a number of by 2030, valuation may cut back annual returns by 6.9%. EPS progress (estimated at 3% per 12 months) 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 engaging for earnings traders, the overall return profile is just not excessive sufficient for a purchase or perhaps a maintain advice. Attributable to valuation, we price KVUE inventory as a promote.

Moreover, the next Certain Dividend databases include probably 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 won’t qualify as Dividend Aristocrats.
The Greatest DRIP Shares: The highest 15 Dividend Aristocrats with no-fee dividend reinvestment plans.

In case you’re in search of shares with distinctive dividend traits, take into account the next Certain Dividend databases:

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