JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock - Currency: USD
Taking everything into account, JNJ scores 6 out of 10 in our fundamental rating. JNJ was compared to 194 industry peers in the Pharmaceuticals industry. JNJ has an excellent profitability rating, but there are some minor concerns on its financial health. JNJ is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
JNJ had positive earnings in the past year.
JNJ had a positive operating cash flow in the past year.
JNJ had positive earnings in each of the past 5 years.
JNJ had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.24%, JNJ belongs to the best of the industry, outperforming 91.89% of the companies in the same industry.
JNJ has a Return On Equity of 20.93%. This is amongst the best in the industry. JNJ outperforms 94.05% of its industry peers.
JNJ has a Return On Invested Capital of 16.25%. This is amongst the best in the industry. JNJ outperforms 93.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.24% | ||
| ROE | 20.93% | ||
| ROIC | 16.25% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 16.74%, JNJ belongs to the best of the industry, outperforming 89.73% of the companies in the same industry.
JNJ's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 27.57%, JNJ belongs to the best of the industry, outperforming 91.89% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
JNJ's Gross Margin of 69.16% is fine compared to the rest of the industry. JNJ outperforms 71.89% of its industry peers.
JNJ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.57% | ||
| PM (TTM) | 16.74% | ||
| GM | 69.16% |
OM growth 3Y0.85%
OM growth 5Y3.47%
PM growth 3Y-15.79%
PM growth 5Y-2.98%
GM growth 3Y-0.31%
GM growth 5Y0.91%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), JNJ is creating some value.
JNJ has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
JNJ has an Altman-Z score of 4.30. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a better Altman-Z score (4.30) than 79.46% of its industry peers.
The Debt to FCF ratio of JNJ is 1.72, which is an excellent value as it means it would take JNJ, only 1.72 years of fcf income to pay off all of its debts.
JNJ has a Debt to FCF ratio of 1.72. This is amongst the best in the industry. JNJ outperforms 94.59% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that JNJ is not too dependend on debt financing.
JNJ has a worse Debt to Equity ratio (0.47) than 63.78% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.72 | ||
| Altman-Z | 4.3 |
ROIC/WACC1.61
WACC10.08%
2.3 Liquidity
JNJ has a Current Ratio of 1.03. This is a normal value and indicates that JNJ is financially healthy and should not expect problems in meeting its short term obligations.
JNJ has a Current ratio of 1.03. This is amonst the worse of the industry: JNJ underperforms 85.41% of its industry peers.
JNJ has a Quick Ratio of 1.03. This is a bad value and indicates that JNJ is not financially healthy enough and could expect problems in meeting its short term obligations.
JNJ has a worse Quick ratio (0.79) than 85.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The earnings per share for JNJ have decreased by -4.22% in the last year.
JNJ 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 4.30% in the past year.
The Revenue has been growing slightly by 1.60% on average over the past years.
EPS 1Y (TTM)-4.22%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%-10.92%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%5.26%
3.2 Future
JNJ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.24% yearly.
JNJ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.36% yearly.
EPS Next Y6.82%
EPS Next 2Y5.75%
EPS Next 3Y5.7%
EPS Next 5Y5.24%
Revenue Next Year1.16%
Revenue Next 2Y2.62%
Revenue Next 3Y3.2%
Revenue Next 5Y3.36%
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 accelerating.
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
JNJ is valuated correctly with a Price/Earnings ratio of 16.25.
Compared to the rest of the industry, the Price/Earnings ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 85.95% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. JNJ is valued slightly cheaper when compared to this.
JNJ is valuated correctly with a Price/Forward Earnings ratio of 15.21.
84.32% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
JNJ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.25 | ||
| Fwd PE | 15.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaper than 82.70% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 85.41% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.84 | ||
| EV/EBITDA | 12.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates JNJ does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)2.38
PEG (5Y)5.7
EPS Next 2Y5.75%
EPS Next 3Y5.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.15%, JNJ has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.35, JNJ pays a better dividend. On top of this JNJ pays more dividend than 92.97% of the companies listed in the same industry.
JNJ's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
5.2 History
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.
Dividend Growth(5Y)9.96%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
JNJ pays out 79.71% of its income as dividend. This is not a sustainable payout ratio.
The dividend of JNJ is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP79.71%
EPS Next 2Y5.75%
EPS Next 3Y5.7%
162.3
+2.62 (+1.64%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners72.88%
Inst Owner Change1.39%
Ins Owners0.04%
Ins Owner Change-0.84%
Market Cap390.76B
Analysts73.57
Price Target173.33 (6.8%)
Short Float %0.78%
Short Ratio2.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
Yearly Dividend4.46
Dividend Growth(5Y)9.96%
DP79.71%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.83%
Min EPS beat(2)3.37%
Max EPS beat(2)8.28%
EPS beat(4)3
Avg EPS beat(4)3.2%
Min EPS beat(4)-0.59%
Max EPS beat(4)8.28%
EPS beat(8)7
Avg EPS beat(8)4.22%
EPS beat(12)10
Avg EPS beat(12)3.31%
EPS beat(16)14
Avg EPS beat(16)4.28%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-0.37%
Max Revenue beat(2)0.38%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-1.06%
Max Revenue beat(4)0.82%
Revenue beat(8)4
Avg Revenue beat(8)-3.38%
Revenue beat(12)4
Avg Revenue beat(12)-11.37%
Revenue beat(16)7
Avg Revenue beat(16)-8.24%
PT rev (1m)-3.28%
PT rev (3m)-2.83%
EPS NQ rev (1m)0.63%
EPS NQ rev (3m)0.87%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)-0.36%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)-1.71%
Revenue NY rev (3m)-1.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.25 | ||
| Fwd PE | 15.21 | ||
| P/S | 4.46 | ||
| P/FCF | 18.84 | ||
| P/OCF | 15.54 | ||
| P/B | 5.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.26 |
EPS(TTM)9.99
EY6.16%
EPS(NY)10.67
Fwd EY6.58%
FCF(TTM)8.62
FCFY5.31%
OCF(TTM)10.44
OCFY6.44%
SpS36.42
BVpS29.14
TBVpS-5.87
PEG (NY)2.38
PEG (5Y)5.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.24% | ||
| ROE | 20.93% | ||
| ROCE | 19.11% | ||
| ROIC | 16.25% | ||
| ROICexc | 19.3% | ||
| ROICexgc | 87.24% | ||
| OM | 27.57% | ||
| PM (TTM) | 16.74% | ||
| GM | 69.16% | ||
| FCFM | 23.66% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y0.85%
OM growth 5Y3.47%
PM growth 3Y-15.79%
PM growth 5Y-2.98%
GM growth 3Y-0.31%
GM growth 5Y0.91%
F-Score4
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.72 | ||
| Debt/EBITDA | 1.06 | ||
| Cap/Depr | 60.4% | ||
| Cap/Sales | 5.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.92% | ||
| Profit Quality | 141.28% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.3 |
F-Score4
WACC10.08%
ROIC/WACC1.61
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-4.22%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%-10.92%
EPS Next Y6.82%
EPS Next 2Y5.75%
EPS Next 3Y5.7%
EPS Next 5Y5.24%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%5.26%
Revenue Next Year1.16%
Revenue Next 2Y2.62%
Revenue Next 3Y3.2%
Revenue Next 5Y3.36%
EBIT growth 1Y-0.84%
EBIT growth 3Y4.99%
EBIT growth 5Y5.12%
EBIT Next Year23.32%
EBIT Next 3Y11.11%
EBIT Next 5Y7.4%
FCF growth 1Y31.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y24.01%
OCF growth 3YN/A
OCF growth 5YN/A