Why NYSE:JNJ is a Top Pick for Dividend Investors.

Last update: May 17, 2024

Unearth the potential of JOHNSON & JOHNSON (NYSE:JNJ) as a dividend stock recommended by our stock screening tool. NYSE:JNJ maintains a robust financial footing and delivers a sustainable dividend. We'll delve into the details below.

What does the Dividend looks like for NYSE:JNJ

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:JNJ has been awarded a 7 for its dividend quality:

JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.04. JNJ pays more dividend than 93.85% of the companies in the same industry.
JNJ's Dividend Yield is a higher than the S&P500 average which is at 2.34.
On average, the dividend of JNJ grows each year by 9.96%, which is quite nice.
JNJ has paid a dividend for at least 10 years, which is a reliable track record.
JNJ has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
JNJ pays out 30.40% of its income as dividend. This is a sustainable payout ratio.

What does the Health looks like for NYSE:JNJ

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:JNJ scores a 7 out of 10:

An Altman-Z score of 4.44 indicates that JNJ is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.44, JNJ is doing good in the industry, outperforming 80.00% of the companies in the same industry.
The Debt to FCF ratio of JNJ is 1.80, which is an excellent value as it means it would take JNJ, only 1.80 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.80, JNJ belongs to the best of the industry, outperforming 94.36% of the companies in the same industry.
JNJ has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
Even though the debt/equity ratio score it not favorable for JNJ, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
JNJ does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Looking at the Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:JNJ has achieved a 8:

With an excellent Return On Assets value of 22.37%, JNJ belongs to the best of the industry, outperforming 97.95% of the companies in the same industry.
JNJ has a better Return On Equity (54.95%) than 97.95% of its industry peers.
JNJ has a Return On Invested Capital of 16.20%. This is amongst the best in the industry. JNJ outperforms 92.82% of its industry peers.
The 3 year average ROIC (14.68%) for JNJ is below the current ROIC(16.20%), indicating increased profibility in the last year.
JNJ has a Profit Margin of 44.92%. This is amongst the best in the industry. JNJ outperforms 96.92% of its industry peers.
JNJ's Profit Margin has improved in the last couple of years.
The Operating Margin of JNJ (28.32%) is better than 93.85% of its industry peers.
JNJ's Operating Margin has improved in the last couple of years.
JNJ's Gross Margin of 69.57% is fine compared to the rest of the industry. JNJ outperforms 74.87% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

Check the latest full fundamental report of JNJ for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.