JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:JNJ - US4781601046 - Common Stock
205.75 USD
-1.74 (-0.84%)
205.9 USD
+0.15 (+0.07%)
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 191 industry peers in the Pharmaceuticals industry. JNJ scores excellent on profitability, but there are some minor concerns on its financial health. JNJ has a correct valuation and a medium growth rate. Finally JNJ also has an excellent dividend rating. This makes JNJ very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
JNJ had positive earnings in the past year.
In the past year JNJ had a positive cash flow from operations.
In the past 5 years JNJ has always been profitable.
JNJ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.03%, JNJ belongs to the top of the industry, outperforming 93.19% of the companies in the same industry.
The Return On Equity of JNJ (31.69%) is better than 93.72% of its industry peers.
With an excellent Return On Invested Capital value of 14.68%, JNJ belongs to the best of the industry, outperforming 94.24% of the companies in the same industry.
JNJ had an Average Return On Invested Capital over the past 3 years of 15.41%. This is above the industry average of 12.85%.
| 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
Looking at the Profit Margin, with a value of 27.26%, JNJ belongs to the top of the industry, outperforming 92.67% of the companies in the same industry.
JNJ's Profit Margin has declined in the last couple of years.
JNJ's Operating Margin of 27.00% is amongst the best of the industry. JNJ outperforms 92.67% of its industry peers.
In the last couple of years the Operating Margin of JNJ has grown nicely.
JNJ's Gross Margin of 68.14% is fine compared to the rest of the industry. JNJ outperforms 76.96% of its industry peers.
In the last couple of years the Gross Margin of JNJ 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), JNJ is creating some value.
JNJ has about the same amout of 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 a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.78 indicates that JNJ is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.78, JNJ is in the better half of the industry, outperforming 72.25% of the companies in the same industry.
JNJ has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as JNJ would need 2.34 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 2.34, JNJ belongs to the best of the industry, outperforming 92.67% of the companies in the same industry.
JNJ has a Debt/Equity ratio of 0.55. This is a neutral value indicating JNJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.55, JNJ is not doing good in the industry: 65.97% of the companies in the same industry are doing better.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 4.78 |
ROIC/WACC1.5
WACC9.79%
2.3 Liquidity
A Current Ratio of 1.07 indicates that JNJ should not have too much problems paying its short term obligations.
With a Current ratio value of 1.07, JNJ is not doing good in the industry: 83.25% of the companies in the same industry are doing better.
A Quick Ratio of 0.80 indicates that JNJ may have some problems paying its short term obligations.
JNJ's Quick ratio of 0.80 is on the low side compared to the rest of the industry. JNJ is outperformed by 82.20% of its industry peers.
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 Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.37% over the past year.
The Earnings Per Share has been growing slightly by 2.85% on average over the past years.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 5.08% in the last year.
JNJ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.60% yearly.
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
JNJ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.68% yearly.
Based on estimates for the next years, JNJ will show a small growth in Revenue. The Revenue will grow by 5.29% on average per year.
EPS Next Y9.85%
EPS Next 2Y8.02%
EPS Next 3Y7.82%
EPS Next 5Y7.68%
Revenue Next Year5.61%
Revenue Next 2Y5.47%
Revenue Next 3Y5.32%
Revenue Next 5Y5.29%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.82, the valuation of JNJ can be described as rather expensive.
Based on the Price/Earnings ratio, JNJ is valued cheaply inside the industry as 81.15% of the companies are valued more expensively.
JNJ is valuated rather cheaply when we compare the Price/Earnings ratio to 27.00, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.65, which indicates a rather expensive current valuation of JNJ.
Based on the Price/Forward Earnings ratio, JNJ is valued a bit cheaper than 79.06% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.70. JNJ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 17.65 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 81.15% of the companies listed in the same industry.
JNJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. JNJ is cheaper than 82.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.3 | ||
| EV/EBITDA | 15.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)2.01
PEG (5Y)6.95
EPS Next 2Y8.02%
EPS Next 3Y7.82%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 2.51%. Purely for dividend investing, there may be better candidates out there.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 0.42. JNJ pays more dividend than 93.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
5.2 History
The dividend of JNJ is nicely growing with an annual growth rate of 9.24%!
JNJ has paid a dividend for at least 10 years, which is a reliable track record.
JNJ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.24%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
JNJ pays out 48.70% of its income as dividend. This is a bit on the high side, but may be sustainable.
JNJ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.7%
EPS Next 2Y8.02%
EPS Next 3Y7.82%
205.75
-1.74 (-0.84%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners75.09%
Inst Owner Change0%
Ins Owners0.03%
Ins Owner Change-0.56%
Market Cap495.71B
Revenue(TTM)92.15B
Net Income(TTM)25.12B
Analysts75.63
Price Target212.83 (3.44%)
Short Float %1%
Short Ratio2.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.51% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP48.7%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.42%
Min EPS beat(2)0.55%
Max EPS beat(2)2.3%
EPS beat(4)4
Avg EPS beat(4)2.37%
Min EPS beat(4)0.55%
Max EPS beat(4)5.96%
EPS beat(8)7
Avg EPS beat(8)2.79%
EPS beat(12)11
Avg EPS beat(12)3.6%
EPS beat(16)14
Avg EPS beat(16)3.08%
Revenue beat(2)2
Avg Revenue beat(2)1.48%
Min Revenue beat(2)0.03%
Max Revenue beat(2)2.92%
Revenue beat(4)3
Avg Revenue beat(4)0.74%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)2.92%
Revenue beat(8)5
Avg Revenue beat(8)0.34%
Revenue beat(12)7
Avg Revenue beat(12)-2.01%
Revenue beat(16)7
Avg Revenue beat(16)-8.34%
PT rev (1m)3.74%
PT rev (3m)15.76%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)-1.66%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.23%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.82 | ||
| Fwd PE | 17.65 | ||
| P/S | 5.38 | ||
| P/FCF | 25.3 | ||
| P/OCF | 20.48 | ||
| P/B | 6.25 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.89 |
EPS(TTM)10.38
EY5.04%
EPS(NY)11.66
Fwd EY5.67%
FCF(TTM)8.13
FCFY3.95%
OCF(TTM)10.05
OCFY4.88%
SpS38.25
BVpS32.9
TBVpS-7.27
PEG (NY)2.01
PEG (5Y)6.95
Graham Number87.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROCE | 17.53% | ||
| ROIC | 14.68% | ||
| ROICexc | 16.82% | ||
| ROICexgc | 69.32% | ||
| OM | 27% | ||
| PM (TTM) | 27.26% | ||
| GM | 68.14% | ||
| FCFM | 21.27% |
ROA(3y)12.79%
ROA(5y)11.65%
ROE(3y)31.38%
ROE(5y)29.12%
ROIC(3y)15.41%
ROIC(5y)14.48%
ROICexc(3y)18.76%
ROICexc(5y)17.88%
ROICexgc(3y)74.12%
ROICexgc(5y)78.04%
ROCE(3y)18.6%
ROCE(5y)17.28%
ROICexgc growth 3Y1.2%
ROICexgc growth 5Y-0.66%
ROICexc growth 3Y3.58%
ROICexc growth 5Y3.41%
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%
F-Score5
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 62.36% | ||
| Cap/Sales | 5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.02% | ||
| Profit Quality | 78.02% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 4.78 |
F-Score5
WACC9.79%
ROIC/WACC1.5
Cap/Depr(3y)59.5%
Cap/Depr(5y)54.84%
Cap/Sales(3y)5.11%
Cap/Sales(5y)4.8%
Profit Quality(3y)96.25%
Profit Quality(5y)104.12%
High Growth Momentum
Growth
EPS 1Y (TTM)1.37%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%15.7%
EPS Next Y9.85%
EPS Next 2Y8.02%
EPS Next 3Y7.82%
EPS Next 5Y7.68%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%6.77%
Revenue Next Year5.61%
Revenue Next 2Y5.47%
Revenue Next 3Y5.32%
Revenue Next 5Y5.29%
EBIT growth 1Y2.89%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year30.55%
EBIT Next 3Y13.35%
EBIT Next 5Y8.85%
FCF growth 1Y24.53%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y19.36%
OCF growth 3Y1.2%
OCF growth 5Y0.72%
JOHNSON & JOHNSON / JNJ FAQ
Can you provide the ChartMill fundamental rating for JOHNSON & JOHNSON?
ChartMill assigns a fundamental rating of 6 / 10 to JNJ.
What is the valuation status of JOHNSON & JOHNSON (JNJ) stock?
ChartMill assigns a valuation rating of 6 / 10 to JOHNSON & JOHNSON (JNJ). This can be considered as Fairly Valued.
What is the profitability of JNJ stock?
JOHNSON & JOHNSON (JNJ) has a profitability rating of 8 / 10.
Can you provide the financial health for JNJ stock?
The financial health rating of JOHNSON & JOHNSON (JNJ) is 6 / 10.
Is the dividend of JOHNSON & JOHNSON sustainable?
The dividend rating of JOHNSON & JOHNSON (JNJ) is 7 / 10 and the dividend payout ratio is 48.7%.