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

Last update: Dec 9, 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.

Dividend Assessment of NYSE:JNJ

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NYSE:JNJ scores a 7 out of 10:

JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.21. JNJ pays more dividend than 93.72% of the companies in the same industry.
JNJ's Dividend Yield is rather good when compared to the S&P500 average which is at 2.20.
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.

Evaluating Health: NYSE:JNJ

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 7 for health:

An Altman-Z score of 4.16 indicates that JNJ is not in any danger for bankruptcy at the moment.
The Altman-Z score of JNJ (4.16) is better than 77.49% of its industry peers.
JNJ has a debt to FCF ratio of 1.72. This is a very positive value and a sign of high solvency as it would only need 1.72 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.72, JNJ belongs to the best of the industry, outperforming 95.29% of the companies in the same industry.
JNJ has a Debt/Equity ratio of 0.47. 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.

A Closer Look at Profitability for NYSE:JNJ

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:JNJ, the assigned 8 is a significant indicator of profitability:

JNJ has a better Return On Assets (8.24%) than 92.15% of its industry peers.
JNJ's Return On Equity of 20.93% is amongst the best of the industry. JNJ outperforms 93.19% of its industry peers.
With an excellent Return On Invested Capital value of 16.28%, JNJ belongs to the best of the industry, outperforming 93.72% of the companies in the same industry.
The last Return On Invested Capital (16.28%) for JNJ is above the 3 year average (14.68%), which is a sign of increasing profitability.
JNJ has a better Profit Margin (16.74%) than 90.05% of its industry peers.
JNJ's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.57%, JNJ belongs to the top of the industry, outperforming 92.15% of the companies in the same industry.
In the last couple of years the Operating Margin of JNJ has grown nicely.
JNJ has a better Gross Margin (69.16%) than 72.77% 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

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.