Pharma Stocks for Income in 2026: Merck Dividend, J&J Pipeline Drive Interest
Global pharma sales are projected to exceed $1.2 trillion in 2026. Merck yields 2.8% with 15 straight dividend increases, while J&J's pipeline gained FDA approvals. Major pharma yields reach 6.6%.
Global pharmaceutical sales are expected to exceed $1.2 trillion in 2026, with large-cap drugmakers attracting investors through a combination of dividend income and pipeline catalysts. Merck & Co. and Johnson & Johnson are among the companies offering both steady shareholder returns and new product momentum.
Worldwide oncology sales alone are projected to be $232 billion this year, and an aging baby boomer generation is expected to help fuel 4.7% annual pharmaceutical revenue growth, pushing global sales to $1.5 trillion by 2030.
Merck & Co. offers a forward dividend of $3.40 per share, translating to a yield of 2.80%. The company maintains a forward payout ratio of 34.93% and has raised its dividend for 15 consecutive years. Its quarterly dividend stands at $0.85, with the next payment scheduled for early April 2026. Merck's oncology franchise, led by blockbuster treatment Keytruda, anchors revenue generation, while its broader drug pipeline provides potential for future growth.
Johnson & Johnson has a strong R&D pipeline focused on immunology, oncology and neuroscience. In 2025, it gained approval for Inlexzoh/TAR-200 for high-risk non-muscle invasive bladder cancer and Imaavy (nipocalimab) for generalized myasthenia gravis. Earlier in 2026, the FDA approved J&J and partner Protagonist Therapeutics' Icotyde (icotrokinra), an oral targeted peptide inhibitor of the IL-23 receptor, for moderate-to-severe plaque psoriasis. Icotyde is a once-a-day pill, whereas most currently available effective options for plaque psoriasis are injectables, such as AbbVie's Skyrizi and J&J's own Tremfya. Inlexzoh is a first-of-its-kind drug-releasing system that provides sustained local delivery of cancer treatment directly into the bladder. Nipocalimab, an FcRn blocker, is under review in the U.S. for warm autoimmune hemolytic anemia, in late-stage studies for hemolytic disease of the fetus and newborn, and Sjogren's disease, and in mid-stage studies for idiopathic inflammatory myopathy. Icotrokinra is also being evaluated in phase III studies for ulcerative colitis and psoriatic arthritis and in phase II for Crohn's disease.
Three of J&J's new cancer drugs — Carvykti, Tecvayli and Talvey — combined generated $3.0 billion in sales in 2025. In 2025, J&J invested more than $32 billion in R&D and M&A, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics. The company expects a more pronounced impact from new products in 2026 than in 2025. J&J shares have risen 47.1% in the past year compared with 9.5% appreciation of the industry.
Several other large pharmaceutical companies offer notable dividend yields. As of May 22, the dividend yields among major pharma stocks included:
- Johnson & Johnson: 2.3%
- AbbVie Inc.: 3.2%
- Merck & Co.: 2.8%
- Amgen Inc.: 3.0%
- Gilead Sciences Inc.: 2.4%
- Pfizer Inc.: 6.6%
- Zoetis Inc.: 2.6%
Among these, AbbVie's key drugs include immunology therapies Humira, Skyrizi and Rinvoq. Amgen is developing MariTide, a monthly injectable GLP-1 weight loss and diabetes candidate currently in mid-phase clinical trials. Gilead Sciences is developing cancer drug domvanalimab and other pipeline assets.