JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock - Currency: USD
Overall JNJ gets a fundamental rating of 6 out of 10. We evaluated JNJ against 197 industry peers in the Pharmaceuticals industry. While JNJ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. JNJ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year JNJ was profitable.
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 each of the past 5 years.
1.2 Ratios
The Return On Assets of JNJ (7.81%) is better than 92.39% of its industry peers.
JNJ has a Return On Equity of 19.68%. This is amongst the best in the industry. JNJ outperforms 92.89% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.95%, JNJ belongs to the top of the industry, outperforming 91.88% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for JNJ is significantly below the industry average of 40.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.81% | ||
| ROE | 19.68% | ||
| ROIC | 14.95% |
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
JNJ has a Profit Margin of 15.84%. This is amongst the best in the industry. JNJ outperforms 91.37% of its industry peers.
In the last couple of years the Profit Margin of JNJ has declined.
Looking at the Operating Margin, with a value of 26.11%, JNJ belongs to the top of the industry, outperforming 91.88% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
JNJ has a better Gross Margin (69.11%) than 75.63% of its industry peers.
JNJ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.11% | ||
| PM (TTM) | 15.84% | ||
| GM | 69.11% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so JNJ is still creating some value.
The number of shares outstanding for JNJ remains at a similar level compared to 1 year ago.
The number of shares outstanding for JNJ has been reduced compared to 5 years ago.
JNJ has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.26 indicates that JNJ is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.26, JNJ belongs to the top of the industry, outperforming 80.20% of the companies in the same industry.
JNJ has a debt to FCF ratio of 1.85. This is a very positive value and a sign of high solvency as it would only need 1.85 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.85, JNJ belongs to the best of the industry, outperforming 93.91% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that JNJ is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.49, JNJ is not doing good in the industry: 60.41% of the companies in the same industry are doing better.
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 | 0.49 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 4.26 |
ROIC/WACC1.48
WACC10.09%
2.3 Liquidity
JNJ has a Current Ratio of 1.11. 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 worse Current ratio (1.11) than 82.23% of its industry peers.
A Quick Ratio of 0.86 indicates that JNJ may have some problems paying its short term obligations.
JNJ has a Quick ratio of 0.86. This is amonst the worse of the industry: JNJ underperforms 81.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
The earnings per share for JNJ have decreased by -3.92% in the last year.
The Earnings Per Share has been growing slightly by 2.85% on average over the past years.
JNJ shows a small growth in Revenue. In the last year, the Revenue has grown by 4.30%.
JNJ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.60% yearly.
EPS 1Y (TTM)-3.92%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%2.21%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%
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 5.39% on average per year.
Based on estimates for the next years, JNJ will show a small growth in Revenue. The Revenue will grow by 3.54% on average per year.
EPS Next Y7.1%
EPS Next 2Y5.93%
EPS Next 3Y5.72%
EPS Next 5Y5.39%
Revenue Next Year2.25%
Revenue Next 2Y3.57%
Revenue Next 3Y4.06%
Revenue Next 5Y3.54%
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
JNJ is valuated correctly with a Price/Earnings ratio of 15.67.
85.79% of the companies in the same industry are more expensive than JNJ, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.29, JNJ is valued a bit cheaper.
A Price/Forward Earnings ratio of 14.05 indicates a correct valuation of JNJ.
84.26% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
JNJ's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.67 | ||
| Fwd PE | 14.05 |
4.2 Price Multiples
JNJ's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. JNJ is cheaper than 81.73% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, JNJ is valued cheaply inside the industry as 83.25% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.13 | ||
| EV/EBITDA | 12.18 |
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)2.21
PEG (5Y)5.5
EPS Next 2Y5.93%
EPS Next 3Y5.72%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.38%. 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 4.29. JNJ pays more dividend than 93.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.38% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.24%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
84.05% of the earnings are spent on dividend by JNJ. 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.
DP84.05%
EPS Next 2Y5.93%
EPS Next 3Y5.72%
157.47
+3.56 (+2.31%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners73.73%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change-3.06%
Market Cap379.48B
Analysts73.57
Price Target173 (9.86%)
Short Float %0.96%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.38% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP84.05%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.48%
Min EPS beat(2)0.68%
Max EPS beat(2)8.28%
EPS beat(4)4
Avg EPS beat(4)3.52%
Min EPS beat(4)0.68%
Max EPS beat(4)8.28%
EPS beat(8)7
Avg EPS beat(8)3.76%
EPS beat(12)11
Avg EPS beat(12)3.4%
EPS beat(16)14
Avg EPS beat(16)4.25%
Revenue beat(2)1
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-0.55%
Max Revenue beat(2)0.38%
Revenue beat(4)1
Avg Revenue beat(4)-0.4%
Min Revenue beat(4)-1.06%
Max Revenue beat(4)0.38%
Revenue beat(8)4
Avg Revenue beat(8)-1.28%
Revenue beat(12)4
Avg Revenue beat(12)-6.27%
Revenue beat(16)6
Avg Revenue beat(16)-8.44%
PT rev (1m)0.35%
PT rev (3m)-3.46%
EPS NQ rev (1m)-1.72%
EPS NQ rev (3m)-2.32%
EPS NY rev (1m)0.26%
EPS NY rev (3m)0.06%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-2.12%
Revenue NY rev (1m)1.07%
Revenue NY rev (3m)-0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.67 | ||
| Fwd PE | 14.05 | ||
| P/S | 4.27 | ||
| P/FCF | 19.13 | ||
| P/OCF | 15.64 | ||
| P/B | 5.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.18 |
EPS(TTM)10.05
EY6.38%
EPS(NY)11.21
Fwd EY7.12%
FCF(TTM)8.23
FCFY5.23%
OCF(TTM)10.07
OCFY6.39%
SpS36.86
BVpS29.67
TBVpS-4.29
PEG (NY)2.21
PEG (5Y)5.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.81% | ||
| ROE | 19.68% | ||
| ROCE | 17.87% | ||
| ROIC | 14.95% | ||
| ROICexc | 18.3% | ||
| ROICexgc | 72.38% | ||
| OM | 26.11% | ||
| PM (TTM) | 15.84% | ||
| GM | 69.11% | ||
| FCFM | 22.34% |
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%
ROICexcg growth 3Y1.2%
ROICexcg 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-Score4
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 1.85 | ||
| Debt/EBITDA | 1.14 | ||
| Cap/Depr | 60.28% | ||
| Cap/Sales | 4.98% | ||
| Interest Coverage | 5.94 | ||
| Cash Conversion | 79.49% | ||
| Profit Quality | 141.06% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | 4.26 |
F-Score4
WACC10.09%
ROIC/WACC1.48
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)-3.92%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%2.21%
EPS Next Y7.1%
EPS Next 2Y5.93%
EPS Next 3Y5.72%
EPS Next 5Y5.39%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%
Revenue Next Year2.25%
Revenue Next 2Y3.57%
Revenue Next 3Y4.06%
Revenue Next 5Y3.54%
EBIT growth 1Y-2.91%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year20.06%
EBIT Next 3Y12.36%
EBIT Next 5Y7.4%
FCF growth 1Y8.74%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y6.47%
OCF growth 3Y1.2%
OCF growth 5Y0.72%