Exploring NYSE:JNJ's dividend characteristics.

Last update: Aug 12, 2024

Our stock screener has singled out JOHNSON & JOHNSON (NYSE:JNJ) as a promising choice for dividend investors. NYSE:JNJ not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Evaluating Dividend: 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:

JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.01. JNJ pays more dividend than 93.26% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, 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 been paying a dividend for at least 10 years, so it has 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 30.49% of its income as dividend. This is a sustainable payout ratio.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:JNJ, the assigned 7 reflects its health status:

JNJ has an Altman-Z score of 4.28. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.28, JNJ is in the better half of the industry, outperforming 79.27% of the companies in the same industry.
The Debt to FCF ratio of JNJ is 2.04, which is a good value as it means it would take JNJ, 2.04 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.04, JNJ belongs to the top of the industry, outperforming 92.75% of the companies in the same industry.
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 Assessment of NYSE:JNJ

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:

JNJ has a better Return On Assets (20.99%) than 97.93% of its industry peers.
The Return On Equity of JNJ (53.14%) is better than 96.89% of its industry peers.
JNJ has a better Return On Invested Capital (15.89%) than 92.75% of its industry peers.
The last Return On Invested Capital (15.89%) for JNJ is above the 3 year average (14.68%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 43.91%, JNJ belongs to the best of the industry, outperforming 96.89% of the companies in the same industry.
In the last couple of years the Profit Margin of JNJ has grown nicely.
Looking at the Operating Margin, with a value of 28.78%, JNJ belongs to the top of the industry, outperforming 93.78% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
JNJ has a better Gross Margin (69.43%) than 72.54% of its industry peers.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

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

Disclaimer

This article should in no way be interpreted as advice. 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.