Johnson & Johnson (JNJ) just made a move that investors have been waiting years to see.
The healthcare heavyweight submitted its OTTAVA robotic surgical system to the FDA for De Novo classification.
That’s a big deal because it marks J&J’s formal entry into the fast-growing robotic surgery market, a space currently dominated by Intuitive Surgical and its da Vinci platform.
For dividend-focused investors, this matters. A lot.
J&J has raised its dividend for 63 consecutive years. The company needs robust growth drivers to maintain that streak. OTTAVA could be precisely what the company needs to fuel MedTech expansion and support future dividend increases.
Johnson & Johnson is eyeing the robotics market
— Source: Gorodenkoff Shutterstock
OTTAVA targets a massive market opportunity
J&J designed OTTAVA to perform multiple procedures in general surgery within the upper abdomen. That includes gastric bypass, gastric sleeve, small bowel resection, and hiatal hernia repair.
The company completed its first clinical trial early this year. Dr. Erik Wilson, Chief of Minimally Invasive and Elective General Surgery at UT Health Houston, performed the initial cases at Memorial Hermann-Texas Medical Center.
“We have taken learnings from Johnson & Johnson’s 140 years in surgery, our decades of leadership in minimally invasive surgery, and the experiences robotic surgeons and hospitals have had over the past 20 years to design a soft tissue robotic system built for the future of surgery,” said Hani Abouhalka, Company Group Chair for Surgery at J&J MedTech.
The FDA also approved a second clinical trial for OTTAVA in inguinal hernia procedures. That’s one of the most common surgeries in the United States.
What makes OTTAVA different
OTTAVA features what J&J calls a “unified architecture.”
- The system integrates surgical instrumentation powered by Ethicon expertise with future connection to the Polyphonic digital ecosystem.
- The design addresses specific pain points that surgeons and their teams face with existing robotic platforms.
- J&J built the system to support multi-specialty soft-tissue surgery across a broad range of procedures.
- That includes the most complex surgeries, which require a multi-quadrant approach.
Tim Schmid, Executive Vice President of MedTech at J&J, emphasized the company’s commitment during the recent earnings call.
“Our surgical technologies are used in most operating rooms globally. And in Q3, we delivered more than 9% growth in biosurgery and almost 7% in wound closure, driven by accelerating adoption of our latest innovations,” Schmid said.
Orthopaedics separation sharpens focus
J&J announced plans to separate its Orthopaedics business into a standalone company called DePuy Synthes. The move will be completed within 18 to 24 months.
That decision directly impacts OTTAVA’s potential.
CFO Joe Wolk explained the financial impact during the Q3 earnings call. If you just look at normalized year-to-date 2025 results, MedTech’s top-line revenue growth and operating margin would both improve by at least 75 basis points following the separation.
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The split allows J&J to concentrate resources on higher-growth markets. The company identified three core focus areas for MedTech: cardiovascular, surgery, and vision.
“This is all about our commitment to continuous portfolio optimization and value creation,” Schmid said. “This decision to separate Ortho is the next major step in that direction. Ortho is a great business, but frankly, one that participates in lower growth markets. This is all about shrinking to grow faster for MedTech.”
Duato reinforced the company’s ambition. “I want to reiterate, as I told you day 1 when I became CEO, that I am fully focused, determined to make our MedTech sector the best-in-class MedTech group in the industry. That’s a total priority for me.”
JNJ stock is a Dividend King
J&J has raised its dividend for 63 consecutive years, making it a Dividend King. The company’s dividend safety and growth doesn’t depend solely on OTTAVA’s success.
- J&J generated $14 billion in free cash flow through the first nine months of 2025.
- Analysts forecast JNJ stock to report a FCF of $18.54 billion this year, according to Tikr.com.
- Given an annual dividend expense of roughly $12.5 billion, JNJ stock has a payout ratio of 68%, which is not too high.
- Moreover, its FCF is forecast to improve to $35.5 billion in 2029, and should support further dividend hikes.
- Analysts forecast the healthcare giant to increase its annual dividend from $5.16 per share in 2025 to $6.32 per share in 2029.
The pharmaceutical business delivered exceptional growth.
- Excluding STELARA, which faces biosimilar competition, J&J’s Innovative Medicine segment grew 16% in Q3. That’s a $50 billion business posting double-digit growth.
- Eleven brands grew at double-digit rates in the quarter. DARZALEX, the company’s multiple myeloma treatment, increased 20%. CARVYKTI, a CAR-T therapy, surged 81%. TREMFYA, used for inflammatory bowel disease, jumped 40%.
- J&J also launched new products that will drive future growth. The company received FDA approval for INLEXZO in bladder cancer and CAPLYTA for major depressive disorder. Both carry peak sales estimates exceeding $5 billion annually.
The company maintains a AAA credit rating. That financial strength provides flexibility to invest in growth while returning capital to shareholders.
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Wolk confirmed the dividend remains secure following the Orthopaedics separation.
MedTech momentum builds heading into 2026
J&J’s cardiovascular portfolio showed strong performance in Q3.
- The segment grew approximately 12% operationally.
- Shockwave, which J&J acquired in 2024, delivered over 20% operational sales growth. The company’s intravascular lithotripsy technology supported its one millionth patient in the quarter.
- European approval of the Javelin Peripheral Intravascular Lithotripsy Catheter should maintain momentum.
- Electrophysiology, where J&J maintains industry leadership, grew close to 10% operationally.
- Real-world data showed that VARIPULSE achieved 99.7% acute effectiveness in nearly 800 patients, with strong safety and no strokes.
- Abiomed posted more than 15% growth in operational sales.
- The company published data in the New England Journal of Medicine showing routine use of Impella CP in patients with heart attack and cardiogenic shock reduced mortality by 16.3% compared to standard care. Patients gained an average of 600 additional days alive.
- Vision grew by more than 6% in Q3. Surgical vision delivered 13.8% operational sales growth, driven by TECNIS intraocular lenses.
Management provided preliminary 2026 guidance suggesting accelerated growth. Wolk noted that current consensus estimates appear conservative.
“Based on my last look at your 2026 models, it appears the current revenue consensus of 4.6% growth in your models for 2026 is lower than we project, which we believe in total will exceed 5%,” Wolk said.
“Similarly, with the expectation that adjusted earnings per share is commensurate with sales growth, there appears to be some upside to the current adjusted earnings per share consensus of $11.39, perhaps as much as $0.05.”
What JNJ investors should watch
The FDA review process for OTTAVA will determine the timing for commercial launch. J&J expects material developments by mid-2026.
The company targets OTTAVA to impact growth starting in 2028. That timeline allows for FDA approval, production ramp-up, and market adoption.
Duato emphasized J&J’s commitment to robotic surgery. “We are determined to be a major player in robotics. I’m always telling you, we are determined to be a major player in robotics. So we continue to have opportunities for capital allocation in both businesses.”
The company also develops MONARCH, a robotic platform for urology. That system offers both percutaneous and endourology access, initially targeting difficult-to-treat kidney stones.
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J&J doesn’t need large acquisitions to hit growth targets. Wolk made that clear during the earnings call. “We are in a position, just to be clear, that we do not need large M&A to deliver in the high end of our growth targets. Let me repeat that. We do not need large M&A to deliver in the high end of our growth targets.”
Instead, the company focuses on smaller deals that leverage its scientific expertise. Examples include Icotrokinra for psoriasis and INLEXZO for bladder cancer.
Both originated from acquisitions costing a few hundred million dollars. Both now have multi-billion-dollar peak sales potential.
That approach aligns with J&J’s strength in early-stage development. The company completed more than 60 deals in the last 18 months, most of which didn’t make headlines.
Bottom line for dividend investors
OTTAVA represents a significant opportunity for J&J to expand its MedTech business and compete in high-growth markets. The submission to the FDA marks concrete progress after years of development.
The Orthopaedics separation sharpens the company’s focus and should improve margins. That creates more resources to invest in platforms like OTTAVA while maintaining dividend growth.
J&J’s pharmaceutical business continues to deliver steady growth, while new product launches position it well for 2026 and beyond.
The dividend remains safe, given that free cash flow generation supports both reinvestment and shareholder returns. Management expects no change to the dividend following the Orthopaedics spin.
For investors seeking dividend growth, J&J offers a compelling combination. The company maintains its 63-year streak of dividend increases while pursuing expansion in high-growth markets.
OTTAVA could be the catalyst that accelerates MedTech performance and supports future dividend increases.
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