Uncovering Dividend Opportunities with NYSE:JNJ.

Last update: Jun 7, 2024

Consider JOHNSON & JOHNSON (NYSE:JNJ) as a top pick for dividend investors, identified by our stock screening tool. NYSE:JNJ shines in terms of profitability, solvency, and liquidity, all while paying a decent dividend. Let's dive deeper into the analysis.

Looking at the Dividend

To gauge a stock's dividend quality, ChartMill utilizes a Dividend Rating ranging from 0 to 10. This comprehensive assessment considers various dividend aspects, including yield, history, growth, and sustainability. NYSE:JNJ has achieved a 7 out of 10:

JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.15. JNJ pays more dividend than 93.78% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, JNJ pays a bit more dividend than the S&P500 average.
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.
30.40% of the earnings are spent on dividend by JNJ. This is a low number and sustainable payout ratio.

Looking at the Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:JNJ was assigned a score of 8 for health:

An Altman-Z score of 4.34 indicates that JNJ is not in any danger for bankruptcy at the moment.
The Altman-Z score of JNJ (4.34) is better than 80.83% of its industry peers.
JNJ has a debt to FCF ratio of 1.80. This is a very positive value and a sign of high solvency as it would only need 1.80 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.80, JNJ belongs to the top of the industry, outperforming 93.78% of the companies in the same industry.
A Debt/Equity ratio of 0.45 indicates that JNJ is not too dependend on debt financing.
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.
The current and quick ratio evaluation for JNJ is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NYSE:JNJ's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:JNJ, the assigned 8 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 22.37%, JNJ belongs to the top of the industry, outperforming 97.93% of the companies in the same industry.
With an excellent Return On Equity value of 54.95%, JNJ belongs to the best of the industry, outperforming 97.41% of the companies in the same industry.
JNJ has a Return On Invested Capital of 16.20%. This is amongst the best in the industry. JNJ outperforms 92.75% of its industry peers.
The last Return On Invested Capital (16.20%) for JNJ is above the 3 year average (14.68%), which is a sign of increasing profitability.
JNJ has a better Profit Margin (44.92%) than 96.89% of its industry peers.
In the last couple of years the Profit Margin of JNJ has grown nicely.
With an excellent Operating Margin value of 28.32%, JNJ belongs to the best of the industry, outperforming 93.78% of the companies in the same industry.
In the last couple of years the Operating Margin of JNJ has grown nicely.
JNJ has a Gross Margin of 69.57%. This is in the better half of the industry: JNJ outperforms 73.06% of its industry peers.

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

For an up to date full fundamental analysis you can check the fundamental report of JNJ

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.