JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:JNJ • US4781601046
227.25 USD
-0.04 (-0.02%)
At close: Jan 30, 2026
227.25 USD
0 (0%)
After Hours: 1/30/2026, 5:38:02 PM
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 190 industry peers in the Pharmaceuticals industry. JNJ has an excellent profitability rating, but there are some minor concerns on its financial health. JNJ has a decent growth rate and is not valued too expensively. Finally JNJ also has an excellent dividend rating. These ratings could make JNJ a good candidate for dividend investing.
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
- JNJ's Return On Assets of 13.03% is amongst the best of the industry. JNJ outperforms 93.16% of its industry peers.
- JNJ has a better Return On Equity (31.69%) than 93.68% of its industry peers.
- The Return On Invested Capital of JNJ (14.16%) is better than 93.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROIC | 14.16% |
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
- JNJ has a Profit Margin of 27.26%. This is amongst the best in the industry. JNJ outperforms 92.63% of its industry peers.
- In the last couple of years the Profit Margin of JNJ has grown nicely.
- JNJ's Operating Margin of 27.00% is amongst the best of the industry. JNJ outperforms 92.63% of its industry peers.
- In the last couple of years the Operating Margin of JNJ has grown nicely.
- With a decent Gross Margin value of 68.14%, JNJ is doing good in the industry, outperforming 76.84% of the companies in the same industry.
- 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 3Y6.15%
OM growth 5Y6.99%
PM growth 3Y8.26%
PM growth 5Y9.82%
GM growth 3Y-0.67%
GM growth 5Y0.65%
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 5.04. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
- JNJ has a Altman-Z score of 5.04. This is in the better half of the industry: JNJ outperforms 73.68% of its industry peers.
- 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.
- JNJ has a Debt to FCF ratio of 2.34. This is amongst the best in the industry. JNJ outperforms 93.16% of its industry peers.
- A Debt/Equity ratio of 0.55 indicates that 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: 65.79% 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 | 5.04 |
ROIC/WACC1.46
WACC9.71%
2.3 Liquidity
- A Current Ratio of 1.07 indicates that JNJ should not have too much problems paying its short term obligations.
- JNJ's Current ratio of 1.07 is on the low side compared to the rest of the industry. JNJ is outperformed by 82.63% 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.
- With a Quick ratio value of 0.80, JNJ is not doing good in the industry: 82.11% of the companies in the same industry are doing better.
- The current and quick ratio evaluation for JNJ is rather negative, while it does have 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
- JNJ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.11%, which is quite good.
- Measured over the past 5 years, JNJ shows a small growth in Earnings Per Share. The EPS has been growing by 6.11% on average per year.
- JNJ shows a small growth in Revenue. In the last year, the Revenue has grown by 6.05%.
- The Revenue has been growing slightly by 2.67% on average over the past years.
EPS 1Y (TTM)8.11%
EPS 3Y2.06%
EPS 5Y6.11%
EPS Q2Q%20.59%
Revenue 1Y (TTM)6.05%
Revenue growth 3Y5.6%
Revenue growth 5Y2.67%
Sales Q2Q%9.08%
3.2 Future
- Based on estimates for the next years, JNJ will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.17% on average per year.
- The Revenue is expected to grow by 5.37% on average over the next years.
EPS Next Y7.03%
EPS Next 2Y7.63%
EPS Next 3Y7.31%
EPS Next 5Y8.17%
Revenue Next Year6.76%
Revenue Next 2Y6.06%
Revenue Next 3Y6.02%
Revenue Next 5Y5.37%
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
- With a Price/Earnings ratio of 21.04, JNJ is valued on the expensive side.
- JNJ's Price/Earnings ratio is a bit cheaper when compared to the industry. JNJ is cheaper than 79.47% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.30. JNJ is valued slightly cheaper when compared to this.
- JNJ is valuated rather expensively with a Price/Forward Earnings ratio of 19.66.
- JNJ's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. JNJ is cheaper than 77.89% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.57. JNJ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.04 | ||
| Fwd PE | 19.66 |
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 80.53% of the companies listed 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 82.11% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.94 | ||
| EV/EBITDA | 17.36 |
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 excellent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)2.99
PEG (5Y)3.45
EPS Next 2Y7.63%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
- JNJ has a Yearly Dividend Yield of 2.28%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 0.48, JNJ pays a better dividend. On top of this JNJ pays more dividend than 92.63% of the companies listed in the same industry.
- JNJ's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
5.2 History
- On average, the dividend of JNJ grows each year by 9.24%, which is quite nice.
- 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 2Y7.63%
EPS Next 3Y7.31%
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 5 / 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%.