Stock (Symbol) |
Johnson & Johnson (JNJ) |
Stock Price |
$127 |
Sector |
| Healthcare |
Data is as of |
| May 28, 2017 |
Expected to Report |
| Jul 18 |
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 delivering good results. J&J and Microsoft are two of the safest stocks in the world, and I consider JNJ a stock that can be held by conservative investors or trust accounts for generations. The stock’s grown 7% per year the past decade and analysts have an Est. LTG of 7% per year on the stock. Right now JNJ is growing faster than that as profits have grown 13%, 10% and 9% the past three qtrs. So in a nutshell, this stock is timely and is a good one to own right now. Here’s JNJ’s segment breakdown:
J&J’s credo is “Business must make a sound profit” and JNJ has delivered profit growth 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 has increased its dividend every year since 1963, and yields a plump 3%. So if the stock grows 7% a year and investors earn 3% while waiting, that would be a 10% total annual return. Not bad. At $127, JNJ sells for 18x earnings, and is fairly valued at this level. |
One Year Chart |
 Last qtr the company grew sales just 2% for the 2nd straight qtr, but profits increased 9% and beat the 5% estimate. Qtrly profit Estimates for the next 4 qtrs are 3%, 6%, 8% and 3% for the. This stock chart looks good if you cover up the profit growth along the bottom. In fact, if this were a growth stock I bet there would be a big move up coming next. |
Fair Value |
 With interest rates low, stocks should have higher P/Es. My Fair Value on JNJ is 18x earnings, which is $128 per share — around where the stock is now. So it’s not undervalued, but not overvalued either. |
Bottom Line |
 Johnson & Johnson is a fabulous stock for conservative investors. But while JNJ delivers stability it lags in its profit growth rate. Luckily, profits are growing faster than the historic norm and we could see 9% profit growth for the third consecutive year when it’s said and done. JNJ stock ranks 29th of 33 stocks in the Conservative Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 29 of 23 |
