With a strong product portfolio, Johnson & Johnson (JNJ, Financial) entered the new fiscal year on a strong note. The company released strong results, with a solid improvement in earnings. The company has gained market share. Now, it is planning to increase the dividend offering, which will help it gain more market share in the future. Let us take a closer look at the stock.
Looking ahead
Moving deeper, Johnson & Johnson is one of the leading companies in the pharmaceutical segment and is gaining much traction all over U.S. The company is optimistic about the growth in the healthcare segment. The U.S economy is improving impressively which will help the people to access affordable quality care. This will surely improve the demand of medicines for deadly diseases such as cancer, Obesity and heart diseases. This will give Johnson & Johnson ample opportunities of better performance in future. Even the government is playing a major role in promoting the healthcare growth by taking steps to reward innovations through FDA and EMEA designations which will also speed up the product review times.
With this growth and support by the government, Johnson & Johnson confident about securing a leading position in the market. This will also trigger off its core businesses which will contribute meaningfully to the company’s growth story. In addition, Johnson & Johnson is now altering its way to interact with the customers expecting these ways effectively and efficiently drive its growth in future.
Strategies worth noting
Johnson & Johnson is undertaking many strategies that it thinks will take it to better profitability levels. It is laser focused on innovations and is engaged in developing differentiated products that will help the company to meet the growing demand in medical segment. It is also strengthening its product portfolio. Its previously launched 14 new products are getting good attraction in the market and has contributed well company’s top line.
Moving ahead, Johnson & Johnson also focusing on greater cross segment collaboration. The company has made significant investments in the past in these innovations which has helped the company to improve its metrics so far.
It is seeing good opportunity in the oncology segment as it is estimated that by 2025 there will be 1 million cases of lung cancer. Anticipating this, Johnson & Johnson has announced its plans to optimize its expertise on oncology to help the Chinese government to fight lung cancer.
Conclusion
Now shifting the spotlights to the valuation, the stock looks reasonable with a trailing P/E of 16.79 but the forward P/E of 15.64 shows smooth earnings growth in near term. I would like to suggest the investors to definitely include Johnson & Johnson in their portfolio as it’s also has an impressive profit margin of 23.27%. It is definitely worth your dollars now.
