JOHNSON & JOHNSON (1JNJ.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1JNJ - US4781601046 - Common Stock
191.44 EUR
+6.04 (+3.26%)
1JNJ gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 55 industry peers in the Pharmaceuticals industry. While 1JNJ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. 1JNJ is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- 1JNJ had positive earnings in the past year.
- 1JNJ had a positive operating cash flow in the past year.
- 1JNJ had positive earnings in each of the past 5 years.
- Each year in the past 5 years 1JNJ had a positive operating cash flow.
1.2 Ratios
- 1JNJ has a better Return On Assets (13.03%) than 81.82% of its industry peers.
- 1JNJ has a better Return On Equity (31.69%) than 72.73% of its industry peers.
- 1JNJ has a better Return On Invested Capital (14.68%) than 72.73% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for 1JNJ is in line with the industry average of 14.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROIC | 14.68% |
ROA(3y)12.79%
ROA(5y)11.65%
ROE(3y)31.38%
ROE(5y)29.12%
ROIC(3y)15.41%
ROIC(5y)14.48%
1.3 Margins
- 1JNJ has a better Profit Margin (27.26%) than 87.27% of its industry peers.
- In the last couple of years the Profit Margin of 1JNJ has declined.
- 1JNJ's Operating Margin of 27.00% is fine compared to the rest of the industry. 1JNJ outperforms 70.91% of its industry peers.
- In the last couple of years the Operating Margin of 1JNJ has grown nicely.
- With a Gross Margin value of 68.14%, 1JNJ perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
- In the last couple of years the Gross Margin of 1JNJ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27% | ||
| PM (TTM) | 27.26% | ||
| GM | 68.14% |
OM growth 3Y0.33%
OM growth 5Y3.14%
PM growth 3Y-15.79%
PM growth 5Y-2.98%
GM growth 3Y-0.56%
GM growth 5Y0.76%
2. Health
2.1 Basic Checks
- 1JNJ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for 1JNJ remains at a similar level compared to 1 year ago.
- The number of shares outstanding for 1JNJ has been reduced compared to 5 years ago.
- 1JNJ has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 5.06 indicates that 1JNJ is not in any danger for bankruptcy at the moment.
- The Altman-Z score of 1JNJ (5.06) is better than 74.55% of its industry peers.
- 1JNJ has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as 1JNJ would need 2.34 years to pay back of all of its debts.
- 1JNJ has a better Debt to FCF ratio (2.34) than 83.64% of its industry peers.
- A Debt/Equity ratio of 0.55 indicates that 1JNJ is somewhat dependend on debt financing.
- 1JNJ has a Debt to Equity ratio of 0.55. This is comparable to the rest of the industry: 1JNJ outperforms 56.36% of its industry peers.
- Although 1JNJ 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 5.06 |
ROIC/WACC1.51
WACC9.75%
2.3 Liquidity
- A Current Ratio of 1.07 indicates that 1JNJ should not have too much problems paying its short term obligations.
- 1JNJ has a Current ratio of 1.07. This is in the lower half of the industry: 1JNJ underperforms 65.45% of its industry peers.
- A Quick Ratio of 0.80 indicates that 1JNJ may have some problems paying its short term obligations.
- The Quick ratio of 1JNJ (0.80) is worse than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- 1JNJ shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.37%.
- 1JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
- The Revenue has been growing slightly by 5.08% in the past year.
- The Revenue has been growing slightly by 1.60% on average over the past years.
EPS 1Y (TTM)1.37%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%15.7%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%6.77%
3.2 Future
- 1JNJ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.93% yearly.
- The Revenue is expected to grow by 5.37% on average over the next years.
EPS Next Y8.9%
EPS Next 2Y7.57%
EPS Next 3Y7.79%
EPS Next 5Y7.93%
Revenue Next Year5.63%
Revenue Next 2Y5.56%
Revenue Next 3Y5.35%
Revenue Next 5Y5.37%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 22.08, which indicates a rather expensive current valuation of 1JNJ.
- 1JNJ's Price/Earnings ratio is in line with the industry average.
- 1JNJ is valuated rather cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 19.83 indicates a rather expensive valuation of 1JNJ.
- 1JNJ's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of 1JNJ to the average of the S&P500 Index (25.72), we can say 1JNJ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.08 | ||
| Fwd PE | 19.83 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1JNJ indicates a slightly more expensive valuation: 1JNJ is more expensive than 60.00% of the companies listed in the same industry.
- 1JNJ's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.18 | ||
| EV/EBITDA | 17.51 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- 1JNJ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.48
PEG (5Y)7.74
EPS Next 2Y7.57%
EPS Next 3Y7.79%
5. Dividend
5.1 Amount
- 1JNJ has a Yearly Dividend Yield of 2.37%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.62, 1JNJ pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, 1JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
- On average, the dividend of 1JNJ grows each year by 9.24%, which is quite nice.
Dividend Growth(5Y)9.24%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 1JNJ pays out 48.70% of its income as dividend. This is a bit on the high side, but may be sustainable.
- 1JNJ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.7%
EPS Next 2Y7.57%
EPS Next 3Y7.79%
JOHNSON & JOHNSON / 1JNJ.MI FAQ
What is the fundamental rating for 1JNJ stock?
ChartMill assigns a fundamental rating of 5 / 10 to 1JNJ.MI.
What is the valuation status of JOHNSON & JOHNSON (1JNJ.MI) stock?
ChartMill assigns a valuation rating of 3 / 10 to JOHNSON & JOHNSON (1JNJ.MI). This can be considered as Overvalued.
Can you provide the profitability details for JOHNSON & JOHNSON?
JOHNSON & JOHNSON (1JNJ.MI) has a profitability rating of 7 / 10.
What is the valuation of JOHNSON & JOHNSON based on its PE and PB ratios?
The Price/Earnings (PE) ratio for JOHNSON & JOHNSON (1JNJ.MI) is 22.08 and the Price/Book (PB) ratio is 6.97.
What is the financial health of JOHNSON & JOHNSON (1JNJ.MI) stock?
The financial health rating of JOHNSON & JOHNSON (1JNJ.MI) is 5 / 10.