Stock (Symbol) |
Johnson & Johnson (JNJ) |
Stock Price |
$115 |
Sector |
| Healthcare |
Data is as of |
| November 21, 2016 |
Expected to Report |
| Jan 24 |
Company Description |
 Johnson & Johnson is a holding company. The Company is engaged in the research and development, manufacture and sale of a range of products in the health care field. The Company has more than 265 operating companies conducting business around the world. The Company’s primary focus is products related to human health and well-being. The Company is organized into three business segments: Consumer, Pharmaceutical and Medical Devices. The Company’s subsidiaries operate 134 manufacturing facilities occupying approximately 21.5 million square feet of floor space. The Company’s research facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom. Source: Thomson Financial |
Sharek’s Take |
 Johnson & Johnson (JNJ) is having an outstanding year, and solid results could continue for years to come as the company brags about ten drugs in development that could be approved between 2015-2019 with each having the potential of $1 billion in annual sales or more. In fact, drugs sales are leading the company’s performance now:
J&J’s credo is “Business must make a sound profit” and JNJ has grown profits every year since 1984. The company has a AAA rating from S&P and a dividend that’s has increased every year since 1963. JNJ is one of the two safest stocks in the world — with Microsoft. The stock carries an Estimated Long-Term Growth Rate of 7% per year in addition to a robust yield of 3%. JNJ is down a bit from its Summer highs as Healthcare stocks have been weak, but profits are expected to climb an average of 7% the next 4 qtrs and the company has beaten the street the last 5 qtrs so I expect solid results to continue into 2017 and beyond. |
One Year Chart |
 Last qtr the company grew profits 13% on a 4% gain in sales. Profits beat the 11% estimate. Annual Profit estimates nudged higher once again. Profit growth Estimates are 9%, 5%, 5% and 5% for the next 4 qtrs. The P/E of 16 is good. |
Fair Value |
 JNJ is selling for 17x earnings, and if it has that same P/E in 2017 and makes $7.14 the stock will be $121, which is just 5% upside. But you also get the 3% dividend, for an estimated total return of 8% in a year. That’s good considering the high safety level this stock has. Also, J&J has been beating the street by a little and upping estimates. |
Bottom Line |
 Johnson & Johnson is a fabulous stock for conservative investors. Profits are expected to climb in the high single-digits for the next year and the yield of 3% is good. The only negatives I see are the Healthcare sector is weak right now and there are other safe stocks with the potential to deliver double-digit total returns, which might be a stretch for this stock. JNJ stock ranks 23rd of 29 stocks in the Conservative Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 23 of 29 |
