Here is a long-term analysis of Johnson & Johnson (JNJ, Financial). The article gives investors an overview of the company’s financial history, business diversification as well as the valuation level and dividend policy.
Company Profile:
Johnson & Johnson is a global healthcare holding company. It is engaged in the research and development, manufacture and sale of a range of products related to health care and well being. The company employs 115,000 people around the world.
Business Diversification:
As of the latest quarter, the company operated in three segments: Consumer (23 percent of sales and 12 percent of profits), Pharmaceutical (37 percent of sales and 47 percent of profits) and Medical Devices and Diagnostics (40 percent of sales and 41 percent of profits). Roughly 53 percent of sales came from abroad.
Valuation of the Company:
Dividend Yield: 3.14 Percent / 3.39 Percent expected
Payout Ratio: 44.1 Percent
5-Year Dividend Growth: 10.37 Percent
Market Capitalization: 182.4 billion
Cash and Short Term Investments: 26.8 billion
Long-Term Debt: 9.3 billion
Cash flow from Operations: 16.4 billion
CAPEX: 2.4 billion
All pricing measures decreased over the past ten years. Price to earnings and price to book ratio slipped in total 57 percent, price to cash flow and price to sales ratio decreased 45 percent.
Long-Term Fundamentals and Dividends:
The company had a strong track record. Sales of Johnson & Johnson rose 90 percent over the past decade. Earnings before taxes and interest (EBIT) increased by 115 percent and net income finally grew in total 135 percent. Due to share buybacks, earnings per share rose 160 percent.
Johnson & Johnson paid dividends since 1944. The company raised dividends for 48 consecutive years. Next Ex-Div. Date is May 26, 2011. Payments will be received on June 14, 2011. The current dividend is the first quarter dividend at the same rate ($0.57).
Competitors:
The company has several competitors in each of its division. Within the consumer segment, most rivals are Procter and Gamble (PG, Financial), Kimberly Clark (KMB, Financial), Colgate Palmolive (CL, Financial), Reckitt Benckiser (RB, Financial). Within the Pharmaceuticals segment, Pfizer (PFE, Financial), Merck (MRK, Financial), Eli Lilly (LLY, Financial), Glaxo Smithkline (GSK, Financial), Novartis (NOV) or Abbott Laboratoires (ABT, Financial) are big competitors. At least, within the Medical Devices and Diagnostics segment, companies like, Stryker (SYK, Financial), Medtronic (MDT, Financial), Zimmer Holding (ZMH, Financial) or Smith and Nephew (SNN) compete with Johnson & Johnson.
Consensus Developments:
In accordance to Reuters, 22 analysts covered JNJ and submitted an outperform rating with a mean target price of USD 69.38 as of May 12, 2011. This value represents an upside of 3.26 percent compared to the close end price of May 12, 2011. The mean target price estimate increased over the past 18 month by 6.7 percent.
Related Stock Ticker Symbols:
JNJ, PG, KMB, CL, RB, PFE, MRK, LLY, GSK, ABT, SYK, MDT, ZMH, SNN
Full Disclosure:
Lon , not intended to buy any stocks or obligations of the company within the next 72 hours. I don’t receive any compensation by the company.
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· 13 Health Care Stocks With Double Digit Long-Term Growth
· Highest Dividend-Yields in Medical Instruments & Supplies Sector
· 12 Best Yielding Medical Instruments And Supplies Stocks
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Company Profile:
Johnson & Johnson is a global healthcare holding company. It is engaged in the research and development, manufacture and sale of a range of products related to health care and well being. The company employs 115,000 people around the world.
Business Diversification:
As of the latest quarter, the company operated in three segments: Consumer (23 percent of sales and 12 percent of profits), Pharmaceutical (37 percent of sales and 47 percent of profits) and Medical Devices and Diagnostics (40 percent of sales and 41 percent of profits). Roughly 53 percent of sales came from abroad.
Valuation of the Company:
Dividend Yield: 3.14 Percent / 3.39 Percent expected
Payout Ratio: 44.1 Percent
5-Year Dividend Growth: 10.37 Percent
Market Capitalization: 182.4 billion
Cash and Short Term Investments: 26.8 billion
Long-Term Debt: 9.3 billion
Cash flow from Operations: 16.4 billion
CAPEX: 2.4 billion
All pricing measures decreased over the past ten years. Price to earnings and price to book ratio slipped in total 57 percent, price to cash flow and price to sales ratio decreased 45 percent.
Long-Term Fundamentals and Dividends:
The company had a strong track record. Sales of Johnson & Johnson rose 90 percent over the past decade. Earnings before taxes and interest (EBIT) increased by 115 percent and net income finally grew in total 135 percent. Due to share buybacks, earnings per share rose 160 percent.
Johnson & Johnson paid dividends since 1944. The company raised dividends for 48 consecutive years. Next Ex-Div. Date is May 26, 2011. Payments will be received on June 14, 2011. The current dividend is the first quarter dividend at the same rate ($0.57).
Competitors:
The company has several competitors in each of its division. Within the consumer segment, most rivals are Procter and Gamble (PG, Financial), Kimberly Clark (KMB, Financial), Colgate Palmolive (CL, Financial), Reckitt Benckiser (RB, Financial). Within the Pharmaceuticals segment, Pfizer (PFE, Financial), Merck (MRK, Financial), Eli Lilly (LLY, Financial), Glaxo Smithkline (GSK, Financial), Novartis (NOV) or Abbott Laboratoires (ABT, Financial) are big competitors. At least, within the Medical Devices and Diagnostics segment, companies like, Stryker (SYK, Financial), Medtronic (MDT, Financial), Zimmer Holding (ZMH, Financial) or Smith and Nephew (SNN) compete with Johnson & Johnson.
Consensus Developments:
In accordance to Reuters, 22 analysts covered JNJ and submitted an outperform rating with a mean target price of USD 69.38 as of May 12, 2011. This value represents an upside of 3.26 percent compared to the close end price of May 12, 2011. The mean target price estimate increased over the past 18 month by 6.7 percent.
Related Stock Ticker Symbols:
JNJ, PG, KMB, CL, RB, PFE, MRK, LLY, GSK, ABT, SYK, MDT, ZMH, SNN
Full Disclosure:
Lon , not intended to buy any stocks or obligations of the company within the next 72 hours. I don’t receive any compensation by the company.
Related Articles:
· 10 High Yielding Drug Manufacturers
· 19 Healthcare Growth Stocks With 20+ Percent Operating Margins
· 13 Health Care Stocks With Double Digit Long-Term Growth
· Highest Dividend-Yields in Medical Instruments & Supplies Sector
· 12 Best Yielding Medical Instruments And Supplies Stocks
· 20 Consumer Goods Stocks With Highest Dividend Yield
