3 High-Yield Healthcare Dividend Stocks for Long-Term Income Growth

The healthcare sector has long been a cornerstone for income-focused investors, offering resilience amid macroeconomic volatility. In a rising-interest-rate environment, companies with strong cash flows, disciplined capital allocation, and sustainable dividend policies stand out. Johnson & Johnson (JNJ), Medtronic (MDT), and Omega Healthcare Investors (OHI) exemplify this category, combining robust financial performance with strategic positioning to support long-term income growth.

1. Johnson & Johnson: A Dividend Titan with Resilient Cash Flow

Johnson & Johnson has maintained its status as a dividend aristocrat, raising its payout for 63 consecutive years. In 2025, the company increased its quarterly dividend by 4.8% to $1.30 per share, reflecting confidence in its ability to sustain returns to shareholders. This growth is underpinned by a diversified business model spanning pharmaceuticals, medical devices, and consumer health, which provides stability across economic cycles.

Financial performance in 2025 underscores this resilience. Q3 2025 results showed reported sales growth of 6.8% to $24.0 billion, with adjusted earnings per share (EPS) reaching $2.80. The company raised its full-year sales guidance to $93.7 billion, signaling momentum despite rising interest rates. Johnson & Johnson's commitment to returning capital is evident: over 60% of its five-year free cash flow has been distributed to shareholders. This balance of growth and shareholder returns positions JNJ as a reliable long-term income generator.

2. Medtronic: Innovation-Driven Growth and Consistent Dividends

Medtronic, a leader in medical technology, has raised dividends for 48 consecutive years, with its most recent quarterly payout of $0.71 per share (annualized $2.84) reflecting a 4.8% increase. The company's ability to sustain and grow dividends is supported by strong cash flow generation and a focus on innovation.

In Q2 2026, Medtronic reported revenue of $9.0 billion, a 6.6% year-over-year increase, driven by robust performance in its cardiovascular portfolio. The Cardiac Ablation Solutions segment, for instance, saw a 71% revenue surge, fueled by demand for its pulsed field ablation (PFA) technology. Medtronic also secured regulatory approvals for key products, such as the Altaviva™ device for urinary incontinence, expanding its market reach.

Strategically, Medtronic's emphasis on emerging markets and product innovation ensures long-term growth. The company raised its fiscal 2026 guidance to 5.5% organic revenue growth and $5.62–$5.66 adjusted EPS, demonstrating confidence in its ability to navigate a high-rate environment. For income investors, Medtronic's combination of innovation and disciplined capital returns makes it a compelling choice.

3. Omega Healthcare Investors: High Yield with Strategic Risk Management

Omega Healthcare Investors, a real estate investment trust (REIT) specializing in healthcare facilities, offers a high yield of 4.8% as of December 2025. While its dividend growth has been modest-rising from $0.66 in 2019 to $0.67 in 2025-the company's payout ratio of 163.4% as of May 2025 raises sustainability concerns. However, Omega's strategic initiatives and strong balance sheet mitigate these risks.

In Q3 2025, Omega reported net income of $185 million and AFFO of $0.79 per share, while raising its 2025 AFFO guidance to $3.08–$3.10 per share. The company's triple-net lease model, which provides stable rental income with annual escalators, supports long-term cash flow. Additionally, Omega has reduced leverage to 3.59x and expanded its portfolio through $978 million in new investments in 2025.

A key strategic move was the formation of a joint venture with Saber Healthcare Holdings, acquiring a 49% stake in 64 facilities with an initial 9.3% yield and 2% annual escalators. This diversification, combined with proactive debt management-such as replacing its $1.45 billion credit facility with a $2.3 billion unsecured facility-positions Omega to maintain its dividend despite rising rates. Analysts note that Omega's AFFO coverage of the dividend is strong, with management signaling potential increases if the payout ratio drops to the low 80s.

Conclusion: Balancing Yield and Sustainability

In a rising-rate environment, investors must prioritize companies that combine high yields with durable cash flows and strategic adaptability. Johnson & Johnson and Medtronic offer the stability of diversified healthcare giants with proven dividend growth, while Omega Healthcare Investors provides a high yield supported by disciplined capital deployment and a resilient REIT model. Together, these three stocks form a well-rounded portfolio for long-term income growth, addressing both immediate yield needs and macroeconomic uncertainties.