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China is still considered the largest emerging market, and is also expected to grow pharmaceutical sales fastest. The country is expecting 15% to 18% pharmaceutical sales growth over the next several years. Both Johnson & Johnson and Abbott Laboratories are attempting to capture this strong growth trend.
Based on my 8 rules of dividend investing (more on that below), Abbott Laboratories has the advantage, but Johnson & Johnson is a fantastic company as well. Both businesses make excellent investments for long-term oriented shareholders seeking rising income.
Johnson & Johnson is the largest publicly traded health care business in the world with a market cap of $294 billion. Abbott Laboratories is a giant multinational corporation in its own right. The company has a market cap of about $64 billion.
Abbott Laboratories generates about 60% of its pharmaceutical revenue in emerging markets today and is expected to generate more than $2.8 billion in pharmaceutical sales in emerging markets this year. By 2016, it expects to generate 75% of pharmaceutical revenue from emerging markets. Abbott Laboratories is most successful in India, where it has the most sales of any pharmaceutical company.
Johnson & Johnson generates about 20% ($1.7 billion) of its $8.5 billion in pharmaceutical sales in emerging markets. The company's overall pharmaceutical operation is larger than Abbott Laboratories, but Abbott generates more sales in emerging markets. Johnson & Johnson generates the bulk of its pharmaceutical revenue in the U.S. and developed markets, while Abbott Laboratories generates more pharmaceutical revenue from emerging markets than anywhere else.
Abbott Laboratories is specifically focused on emerging market growth, and has positioned itself to better benefit from booming emerging market pharmaceutical sales.
Johnson & Johnson vs. Abbott Laboratories: Dividend Fundamentals
Here's how these two giant health care companies compare to each other using Ben Reynold's 8 Rules of Dividend Investing, which rank high quality dividend stocks using fundamental data.
Johnson & Johnson has the longer dividend history, paying increasing dividends for 52 consecutive years vs. 42 consecutive years for Abbott Laboratories. Both companies' long history of consistent dividend increases shows their commitment to rewarding shareholders.
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