Large-cap pharmaceuticals stocks that pay dividends frequently generate market-beating returns over the long term. The core reason is that these companies tend to sport healthy profit margins, sizable free cash flows, and modest competitive moats. Not all big pharma stocks are market slayers, however. For instance, healthcare behemoth Johnson & Johnson (NYSE: JNJ) hasn't outperformed the broader markets in six years.

JNJ Total Return Level data by YCharts

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Source Fool.com