Best Dividend Stocks. Analyze the stocks with the best dividend, while also showing decent profitability and health.


JOHNSON & JOHNSON

New York Stock Exchange, Inc. / Health Care / Pharmaceuticals

Fundamental Rating

7

Overall JNJ gets a fundamental rating of 7 out of 10. We evaluated JNJ against 196 industry peers in the Pharmaceuticals industry. JNJ has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. JNJ is not valued too expensively and it also shows a decent growth rate. JNJ also has an excellent dividend rating. With these ratings, JNJ could be worth investigating further for dividend investing!.



8

1. Profitability

1.1 Basic Checks

In the past year JNJ was profitable.
In the past year JNJ had a positive cash flow from operations.
Each year in the past 5 years JNJ has been profitable.
Each year in the past 5 years JNJ had a positive operating cash flow.

1.2 Ratios

JNJ has a Return On Assets of 20.99%. This is amongst the best in the industry. JNJ outperforms 97.95% of its industry peers.
JNJ has a Return On Equity of 53.14%. This is amongst the best in the industry. JNJ outperforms 97.44% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.89%, JNJ belongs to the top of the industry, outperforming 92.82% of the companies in the same industry.
JNJ had an Average Return On Invested Capital over the past 3 years of 14.68%. This is significantly below the industry average of 39.88%.
The 3 year average ROIC (14.68%) for JNJ is below the current ROIC(15.89%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 20.99%
ROE 53.14%
ROIC 15.89%
ROA(3y)14.01%
ROA(5y)12%
ROE(3y)34.23%
ROE(5y)30.27%
ROIC(3y)14.68%
ROIC(5y)14.11%

1.3 Margins

JNJ's Profit Margin of 43.91% is amongst the best of the industry. JNJ outperforms 97.44% of its industry peers.
JNJ's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 28.78%, JNJ belongs to the best of the industry, outperforming 94.36% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
JNJ's Gross Margin of 69.43% is fine compared to the rest of the industry. JNJ outperforms 72.82% of its industry peers.
JNJ's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 28.78%
PM (TTM) 43.91%
GM 69.43%
OM growth 3Y4.66%
OM growth 5Y2.82%
PM growth 3Y32.32%
PM growth 5Y17.1%
GM growth 3Y1.74%
GM growth 5Y0.67%

More info and screens

7

2. Health

2.1 Basic Checks

JNJ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
JNJ has less shares outstanding than it did 1 year ago.
JNJ has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, JNJ has an improved debt to assets ratio.

2.2 Solvency

JNJ has an Altman-Z score of 4.34. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a Altman-Z score of 4.34. This is in the better half of the industry: JNJ outperforms 78.97% of its industry peers.
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.
JNJ has a better Debt to FCF ratio (2.04) than 94.36% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that JNJ is somewhat dependend on debt financing.
JNJ's Debt to Equity ratio of 0.56 is on the low side compared to the rest of the industry. JNJ is outperformed by 62.56% of its industry peers.
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.
Industry RankSector Rank
Debt/Equity 0.56
Debt/FCF 2.04
Altman-Z 4.34
ROIC/WACC1.66
WACC9.58%

2.3 Liquidity

A Current Ratio of 1.07 indicates that JNJ should not have too much problems paying its short term obligations.
The Current ratio of JNJ (1.07) is worse than 83.59% of its industry peers.
JNJ has a Quick Ratio of 1.07. This is a bad value and indicates that JNJ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.85, JNJ is doing worse than 83.08% of the companies in the same industry.
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.
Industry RankSector Rank
Current Ratio 1.07
Quick Ratio 0.85

More info and screens

4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 0.96% over the past year.
The Earnings Per Share has been growing slightly by 4.98% on average over the past years.
The Revenue has been growing slightly by 5.13% in the past year.
Measured over the past years, JNJ shows a small growth in Revenue. The Revenue has been growing by 0.86% on average per year.
EPS 1Y (TTM)0.96%
EPS 3Y9.11%
EPS 5Y4.98%
EPS Q2Q%0.71%
Revenue 1Y (TTM)5.13%
Revenue growth 3Y1.03%
Revenue growth 5Y0.86%
Sales Q2Q%-12.08%

3.2 Future

Based on estimates for the next years, JNJ will show a small growth in Earnings Per Share. The EPS will grow by 4.94% on average per year.
The Revenue is expected to grow by 4.64% on average over the next years.
EPS Next Y-2.89%
EPS Next 2Y1.87%
EPS Next 3Y2.85%
EPS Next 5Y4.94%
Revenue Next Year4.12%
Revenue Next 2Y3.67%
Revenue Next 3Y3.63%
Revenue Next 5Y4.64%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More info and screens

6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 15.86, which indicates a correct valuation of JNJ.
Compared to the rest of the industry, the Price/Earnings ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 89.74% of the companies listed in the same industry.
JNJ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 30.52.
Based on the Price/Forward Earnings ratio of 15.35, the valuation of JNJ can be described as correct.
Based on the Price/Forward Earnings ratio, JNJ is valued cheaply inside the industry as 83.08% of the companies are valued more expensively.
JNJ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.99, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 15.86
Fwd PE 15.35

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaply inside the industry as 86.15% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, JNJ is valued cheaply inside the industry as 85.13% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 19.7
EV/EBITDA 12.1

4.3 Compensation for Growth

JNJ has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.18
EPS Next 2Y1.87%
EPS Next 3Y2.85%

More info and screens

7

5. Dividend

5.1 Amount

JNJ has a Yearly Dividend Yield of 3.01%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.95, JNJ pays a better dividend. On top of this JNJ pays more dividend than 93.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.26, JNJ pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.01%

5.2 History

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.
Dividend Growth(5Y)9.96%
Div Incr Years33
Div Non Decr Years33

5.3 Sustainability

JNJ pays out 30.49% of its income as dividend. This is a sustainable payout ratio.
JNJ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP30.49%
EPS Next 2Y1.87%
EPS Next 3Y2.85%

More info and screens