JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 195 industry peers in the Pharmaceuticals industry. While JNJ has a great profitability rating, there are some minor concerns on its financial health. JNJ is not valued too expensively and it also shows a decent growth rate. JNJ also has an excellent dividend rating. This makes JNJ very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year JNJ was profitable.
JNJ had a positive operating cash flow in the past year.
Each year in the past 5 years JNJ has been profitable.
Each year in the past 5 years JNJ had a positive operating cash flow.
1.2 Ratios
JNJ's Return On Assets of 11.26% is amongst the best of the industry. JNJ outperforms 92.82% of its industry peers.
JNJ's Return On Equity of 27.92% is amongst the best of the industry. JNJ outperforms 95.38% of its industry peers.
JNJ has a better Return On Invested Capital (13.67%) than 91.28% of its industry peers.
The Average Return On Invested Capital over the past 3 years for JNJ is in line with the industry average of 14.87%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.26% | ||
| ROE | 27.92% | ||
| ROIC | 13.67% |
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
The Profit Margin of JNJ (24.41%) is better than 95.90% of its industry peers.
JNJ's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 26.16%, JNJ belongs to the top of the industry, outperforming 91.79% of the companies in the same industry.
JNJ's Operating Margin has improved in the last couple of years.
The Gross Margin of JNJ (68.34%) is better than 75.38% of its industry peers.
JNJ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.16% | ||
| PM (TTM) | 24.41% | ||
| GM | 68.34% |
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
JNJ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, JNJ has about the same amount of shares outstanding.
The number of shares outstanding for JNJ has been reduced compared to 5 years ago.
Compared to 1 year ago, JNJ has a worse debt to assets ratio.
2.2 Solvency
JNJ has an Altman-Z score of 4.03. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ's Altman-Z score of 4.03 is fine compared to the rest of the industry. JNJ outperforms 80.00% of its industry peers.
The Debt to FCF ratio of JNJ is 2.57, which is a good value as it means it would take JNJ, 2.57 years of fcf income to pay off all of its debts.
JNJ's Debt to FCF ratio of 2.57 is amongst the best of the industry. JNJ outperforms 92.31% of its industry peers.
JNJ has a Debt/Equity ratio of 0.63. This is a neutral value indicating JNJ is somewhat dependend on debt financing.
JNJ has a worse Debt to Equity ratio (0.63) than 64.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.57 | ||
| Altman-Z | 4.03 |
ROIC/WACC1.34
WACC10.18%
2.3 Liquidity
A Current Ratio of 1.26 indicates that JNJ should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.26, JNJ is doing worse than 77.44% of the companies in the same industry.
JNJ has a Quick 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.
Looking at the Quick ratio, with a value of 1.03, JNJ is doing worse than 74.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
JNJ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.92%.
JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 4.30% in the last year.
Measured over the past years, JNJ shows a small growth in Revenue. The Revenue has been growing by 1.60% on average per year.
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
JNJ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.89% yearly.
The Revenue is expected to grow by 3.87% on average over the next years.
EPS Next Y7.29%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
EPS Next 5Y5.89%
Revenue Next Year2.9%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.87%
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
A Price/Earnings ratio of 15.51 indicates a correct valuation of JNJ.
Based on the Price/Earnings ratio, JNJ is valued cheaper than 85.13% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, JNJ is valued a bit cheaper.
A Price/Forward Earnings ratio of 13.89 indicates a correct valuation of JNJ.
Based on the Price/Forward Earnings ratio, JNJ is valued a bit cheaper than 78.97% of the companies in the same industry.
JNJ's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.51 | ||
| Fwd PE | 13.89 |
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 84.62% of the companies listed in the same industry.
84.62% of the companies in the same industry are more expensive than JNJ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.42 | ||
| EV/EBITDA | 11.55 |
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)2.13
PEG (5Y)5.44
EPS Next 2Y6.02%
EPS Next 3Y6.39%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.42%.
Compared to an average industry Dividend Yield of 4.12, JNJ pays a better dividend. On top of this JNJ pays more dividend than 93.85% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
5.2 History
On average, the dividend of JNJ grows each year by 9.24%, 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)9.24%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
JNJ pays out 54.76% 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.
DP54.76%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
155.92
+3.17 (+2.08%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners74.05%
Inst Owner Change0.55%
Ins Owners0.04%
Ins Owner Change-0.14%
Market Cap375.15B
Analysts72.41
Price Target173.41 (11.22%)
Short Float %0.68%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP54.76%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.32%
Min EPS beat(2)0.68%
Max EPS beat(2)5.96%
EPS beat(4)4
Avg EPS beat(4)4.57%
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)3.64%
EPS beat(16)14
Avg EPS beat(16)4.01%
Revenue beat(2)1
Avg Revenue beat(2)-0.01%
Min Revenue beat(2)-0.55%
Max Revenue beat(2)0.53%
Revenue beat(4)2
Avg Revenue beat(4)0%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)0.53%
Revenue beat(8)5
Avg Revenue beat(8)0.36%
Revenue beat(12)5
Avg Revenue beat(12)-6.08%
Revenue beat(16)6
Avg Revenue beat(16)-8.44%
PT rev (1m)-0.45%
PT rev (3m)0.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.73%
EPS NY rev (1m)0%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.7%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.51 | ||
| Fwd PE | 13.89 | ||
| P/S | 4.2 | ||
| P/FCF | 18.42 | ||
| P/OCF | 15.14 | ||
| P/B | 4.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.55 |
EPS(TTM)10.05
EY6.45%
EPS(NY)11.23
Fwd EY7.2%
FCF(TTM)8.47
FCFY5.43%
OCF(TTM)10.3
OCFY6.61%
SpS37.13
BVpS32.46
TBVpS-1.29
PEG (NY)2.13
PEG (5Y)5.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.26% | ||
| ROE | 27.92% | ||
| ROCE | 17.09% | ||
| ROIC | 13.67% | ||
| ROICexc | 18.54% | ||
| ROICexgc | 72.98% | ||
| OM | 26.16% | ||
| PM (TTM) | 24.41% | ||
| GM | 68.34% | ||
| FCFM | 22.8% |
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-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.57 | ||
| Debt/EBITDA | 1.61 | ||
| Cap/Depr | 60.47% | ||
| Cap/Sales | 4.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.81% | ||
| Profit Quality | 93.4% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.03 |
F-Score5
WACC10.18%
ROIC/WACC1.34
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 Y7.29%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
EPS Next 5Y5.89%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%
Revenue Next Year2.9%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.87%
EBIT growth 1Y-3.64%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year24.74%
EBIT Next 3Y11.9%
EBIT Next 5Y7.92%
FCF growth 1Y25.69%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y21.06%
OCF growth 3Y1.2%
OCF growth 5Y0.72%