What if the most important stock in the Dow Jones wasn’t a tech giant — but a healthcare company? Johnson & Johnson (ticker: JNJ) has quietly shaped the Dow Jones Industrial Average (DJIA) for nearly three decades. Think Band-Aid, Tylenol, joint replacements, and cutting-edge cancer drugs.
JNJ doesn’t rise on hype or crash on headlines. Instead, it delivers predictable growth, life-saving innovations, and rising dividends through good times and bad. From COVID vaccines to courtroom battles, JNJ has weathered it all. And as it sharpens its focus on pharmaceuticals, consumer health products, and medical devices, it may be more important to the Dow’s future than ever before.
Dow Jones Healthcare Shift
In March 1997, the Dow swapped out old Industrials like Texaco, Woolworth, Westinghouse Electric, and Bethlehem Steel. Four new names went in: JNJ, Travelers, Hewlett-Packard, and Walmart. Adding JNJ marked a shift. The index was moving away from coal, steel, and oil. It wanted modern, global businesses. JNJ fit that bill: it had strong research labs and a wide product range. It helped balance the Dow Jones’ tilt toward finance and consumer goods.
Less Roller-Coaster, More Steady Climb
JNJ’s stock is less wild than many of its peers. In the 2008-2009 crisis, it fell by about one-third. By contrast, the S&P 500 lost over half its value, according to a Nasdaq report. The stock recovered steadily in the 2010s, but when COVID hit in 2020, JNJ dropped, though it lost less ground than most companies. By mid-2021, JNJ was above $160 per share again. It hit an all-time high closing price of $168.80 in April 2022, as investors looked to its vaccine efforts and pipeline.
Since that peak, shares have adjusted. JNJ fell roughly 8.6% in 2023 and another 4.8% in 2024, trading around $156 as at time of writing per TradingView. Overall, JNJ’s stock swings since the Dow Jones’ inclusion mirror the health sector: new drug wins lift it, legal setbacks or slower growth hold it back.
Johnson Rallies After COVID Vaccine Setback
Johnson & Johnson’s single-shot Janssen COVID-19 vaccine showed the company’s global reach — but also its limits. When the vaccine came in with 85% efficacy in U.S. trials, investor reaction was lukewarm. Ironically, that news briefly hurt its share price. It fell about 3.6% on the announcement on January 29, 2021, because investors had set a high bar after Pfizer/BioNTech and Moderna showed about 95% efficacy. Market commentary noted that modest efficacy (especially outside the U.S.) weighed on JNJ’s Dow Jones index position.
In 2022, JNJ was forced to slash its earlier $3.5 billion sales forecast due to weak demand for COVID shots in developed markets. Soon after, it returned to its core strengths: pharmaceuticals and medical devices. To steady nerves, it raised its dividend by 6.6% in April 2023 — its 61st straight annual increase.
Then came the Kenvue spin-off. In May 2023, JNJ separated its consumer health brands — like Tylenol and Listerine — into a new company called Kenvue. It raised $13.2 billion and later in 2023, JNJ distributed remaining shares via an exchange offer for another $3.8 billion.
The move trimmed slower-growing segments and sharpened JNJ’s focus on high-growth healthcare innovation.
Driving Growth Through R&D
In the Dow Jones today, Johnson & Johnson is a more streamlined and science-driven company, aiming squarely at the future of medicine. It invests heavily in research and development (R&D), for a recent $55 billion U.S. investment spread over four years.
This year, JNJ won FDA approval for IMAAVY™ (nipocalimab-aahu). This is the first FcRn-blocking antibody for a rare disease called myasthenia gravis. In cancer, its CAR-T therapy Carvykti, and Darzalex for multiple myeloma are well-known. New drugs like Akeega for prostate cancer are in late-stage trials. At medical conferences ASCO and EHA this year, JNJ presented more than 70 oncology studies.
On the device side, JNJ is also pushing forward. Think surgical robots and advanced spine implants. An aging world needs more joint replacements and surgeries, some would opine. Acquisitions like Actelion have added to its pipeline. Each new approval or device launch helps offset slower parts of its business, keeping JNJ fit for its Dow Jones role.
Johnson & Johnson’s Dow Standing
As of publishing, JNJ trades at around $155 per share. That translates to roughly a 2.1% weight in the Dow Jones Slickcharts. Because the Dow is price-weighted, a 1% move in JNJ pushes the index by about 2 basis points. That’s a modest impact compared to big tech names like Microsoft (MSFT) or financial firms like JPMorgan Chase (JPM). Still, JNJ is one of only three healthcare stocks in the 30-stock index (alongside UnitedHealth and Merck) that color investors’ view of the index’s defensive sector.
Challenges and Opportunities: Big Investors and Talcum Lawsuits
About 71% of the company’s shares are held by big institutions. Vanguard owns about 9.7%, followed by BlackRock (8.3%), and State Street (5.6%). Insiders hold under 1%, and hedge funds have a tiny slice. This means broad fund flows sway the stock. When healthcare is in favor, JNJ often outperforms. In risk-off times, it acts as a safe haven. Analysts call it a “defensive value” stock: solid in downturns, but not a fast climber in raging bull markets.
One big challenge hanging over JNJ is the unresolved talcum-based Johnson’s Baby Powder lawsuits. At least 62,000 plaintiffs claim asbestos in the talc caused cancer. Johnson tried to settle these claims with an $8.9 billion plan in 2024, but a U.S. bankruptcy judge rejected it. Earlier this year, a second offering of $10 billion was also rejected.
JNJ is fighting many cases in court with over 59,000 pending “talcum powder lawsuits in multidistrict litigation in New Jersey,” per reports from Drugwatch — a drug, device and product lawsuits firm in Orlando, USA. Other legal issues — opioid suits, device recalls — are smaller by comparison. But the talc litigation remains the biggest overhang on the stock limiting its performance in the Dow Jones.
Emerging Markets May Stabilise JNJ’s Dow Strength
Long term, JNJ should benefit from an aging global population. Chronic diseases and surgeries will rise. Its pipeline — new rare-disease drugs, next-generation cancer therapies, and advanced devices — has promises of growth. Essentially, emerging markets remain a bright spot.
So far, Johnson & Johnson’s Dow inclusion looks safe. Its global scale, strong brand, and financial discipline match the blue-chip profile Dow Jones managers want. Its influence on the index will stay modest but meaningful. For investors, JNJ remains a core pick for a blend of innovation, defensive stability, and steady dividends. It has anchored the DJIA healthcare sector for nearly 30 years — and likely will for many more.
Author: Richardson Chinonyerem
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
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See Also:
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Apple’s Decade in the Dow: Powering Tech’s Market Influence Since 2015 | Disruption Banking
