JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:JNJ • US4781601046
230.75 USD
+3.5 (+1.54%)
At close: Feb 2, 2026
230.8 USD
+0.05 (+0.02%)
After Hours: 2/2/2026, 7:50:17 PM
JNJ gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 191 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. JNJ also has an excellent dividend rating. These ratings would make JNJ suitable 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 93.19% of its industry peers.
- With an excellent Return On Equity value of 31.69%, JNJ belongs to the best of the industry, outperforming 93.72% of the companies in the same industry.
- The Return On Invested Capital of JNJ (14.16%) is better than 93.72% 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
- The Profit Margin of JNJ (27.26%) is better than 92.67% of its industry peers.
- JNJ's Profit Margin has improved in the last couple of years.
- The Operating Margin of JNJ (27.00%) is better than 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.
- JNJ's Gross Margin has been stable in the last couple of years.
| 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 5.03. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
- JNJ has a better Altman-Z score (5.03) than 74.87% of its industry peers.
- The Debt to FCF ratio of JNJ is 2.34, which is a good value as it means it would take JNJ, 2.34 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of JNJ (2.34) is better than 93.19% of its industry peers.
- JNJ has a Debt/Equity ratio of 0.55. This is a neutral value indicating JNJ is somewhat dependend on debt financing.
- JNJ has a Debt to Equity ratio of 0.55. This is in the lower half of the industry: JNJ underperforms 65.97% 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 | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 5.03 |
ROIC/WACC1.45
WACC9.79%
2.3 Liquidity
- JNJ has a Current Ratio of 1.07. This is a normal value and indicates that JNJ is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of JNJ (1.07) is worse than 82.20% 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.
- JNJ has a worse Quick ratio (0.80) than 82.20% of its industry peers.
- 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.
- The Revenue has been growing slightly by 6.05% in the past year.
- Measured over the past years, JNJ shows a small growth in Revenue. The Revenue has been growing by 2.67% on average per year.
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.
- 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
- The Price/Earnings ratio is 21.37, which indicates a rather expensive current valuation of JNJ.
- 79.58% of the companies in the same industry are more expensive than JNJ, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of JNJ to the average of the S&P500 Index (28.41), we can say JNJ is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 19.96, JNJ is valued on the expensive side.
- 77.49% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.64, JNJ is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.37 | ||
| Fwd PE | 19.96 |
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.
- Based on the Price/Free Cash Flow ratio, JNJ is valued cheaper than 81.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.37 | ||
| EV/EBITDA | 17.36 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- JNJ has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.04
PEG (5Y)3.5
EPS Next 2Y7.63%
EPS Next 3Y7.31%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.29%, JNJ has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.62, JNJ pays a better dividend. On top of this JNJ pays more dividend than 92.67% of the companies listed in the same industry.
- JNJ's Dividend Yield is a higher than the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
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
- JNJ pays out 48.70% of its income as dividend. This is a bit on the high side, but may be sustainable.
- The dividend of JNJ is growing, but the earnings are growing slower. 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%.