Why the dividend investor may take a look at NYSE:JNJ.

Last update: Jul 22, 2024

Our stock screening tool has identified JOHNSON & JOHNSON (NYSE:JNJ) as a strong dividend contender with robust fundamentals. NYSE:JNJ exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

Dividend Insights: NYSE:JNJ

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:

Compared to an average industry Dividend Yield of 3.98, JNJ pays a better dividend. On top of this JNJ pays more dividend than 93.81% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, JNJ pays a bit more dividend than the S&P500 average.
The dividend of JNJ is nicely growing with an annual growth rate of 9.96%!
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.

Exploring NYSE:JNJ's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:JNJ has received a 7 out of 10:

JNJ has an Altman-Z score of 4.46. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a better Altman-Z score (4.46) than 79.90% of its industry peers.
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.
JNJ's Debt to FCF ratio of 1.80 is amongst the best of the industry. JNJ outperforms 93.81% of its industry peers.
JNJ has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
Although JNJ does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
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.

Profitability Examination for NYSE:JNJ

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:

JNJ has a Return On Assets of 22.37%. This is amongst the best in the industry. JNJ outperforms 97.94% of its industry peers.
JNJ has a Return On Equity of 54.95%. This is amongst the best in the industry. JNJ outperforms 97.42% of its industry peers.
JNJ has a Return On Invested Capital of 16.20%. This is amongst the best in the industry. JNJ outperforms 92.78% 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.
The Profit Margin of JNJ (44.92%) is better than 96.39% of its industry peers.
JNJ's Profit Margin has improved in the last couple of years.
JNJ's Operating Margin of 28.32% is amongst the best of the industry. JNJ outperforms 93.30% 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 73.20% 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

Disclaimer

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.