JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 195 industry peers in the Pharmaceuticals industry. JNJ gets an excellent profitability rating and is at the same time showing great financial health properties. JNJ is valued correctly, but it does not seem to be growing.
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.
In the past 5 years JNJ has always been profitable.
In the past 5 years JNJ always reported a positive cash flow from operatings.
1.2 Ratios
JNJ has a Return On Assets of 8.24%. This is amongst the best in the industry. JNJ outperforms 92.47% of its industry peers.
JNJ has a better Return On Equity (20.93%) than 93.55% of its industry peers.
JNJ has a better Return On Invested Capital (16.28%) than 93.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for JNJ is significantly below the industry average of 43.99%.
The last Return On Invested Capital (16.28%) for JNJ is above the 3 year average (14.68%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.24% | ||
| ROE | 20.93% | ||
| ROIC | 16.28% |
ROA(3y)14.01%
ROA(5y)12%
ROE(3y)34.23%
ROE(5y)30.27%
ROIC(3y)14.68%
ROIC(5y)14.11%
1.3 Margins
Looking at the Profit Margin, with a value of 16.74%, JNJ belongs to the top of the industry, outperforming 89.78% of the companies in the same industry.
In the last couple of years the Profit Margin of JNJ has grown nicely.
JNJ has a better Operating Margin (27.57%) than 91.94% of its industry peers.
JNJ's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 69.16%, JNJ is doing good in the industry, outperforming 72.04% 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 | 27.57% | ||
| PM (TTM) | 16.74% | ||
| GM | 69.16% |
OM growth 3Y4.66%
OM growth 5Y2.82%
PM growth 3Y32.32%
PM growth 5Y17.1%
GM growth 3Y1.74%
GM growth 5Y0.67%
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.
JNJ has less shares outstanding than it did 1 year ago.
The number of shares outstanding for JNJ has been reduced compared to 5 years ago.
JNJ has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.15 indicates that JNJ is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.15, JNJ is doing good in the industry, outperforming 77.96% of the companies in the same industry.
JNJ has a debt to FCF ratio of 1.72. This is a very positive value and a sign of high solvency as it would only need 1.72 years to pay back of all of its debts.
JNJ has a Debt to FCF ratio of 1.72. This is amongst the best in the industry. JNJ outperforms 95.16% of its industry peers.
JNJ has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of JNJ (0.47) is worse than 63.98% of its industry peers.
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 | 0.47 | ||
| Debt/FCF | 1.72 | ||
| Altman-Z | 4.15 |
ROIC/WACC1.48
WACC10.99%
2.3 Liquidity
A Current Ratio of 1.03 indicates that JNJ should not have too much problems paying its short term obligations.
JNJ has a Current ratio of 1.03. This is amonst the worse of the industry: JNJ underperforms 84.41% of its industry peers.
A Quick Ratio of 0.79 indicates that JNJ may have some problems paying its short term obligations.
JNJ's Quick ratio of 0.79 is on the low side compared to the rest of the industry. JNJ is outperformed by 85.48% 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 | 1.03 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The earnings per share for JNJ have decreased by -2.38% in the last year.
JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.98% yearly.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 4.77% in the last year.
Measured over the past years, JNJ shows a small growth in Revenue. The Revenue has been growing by 0.86% on average per year.
EPS 1Y (TTM)-2.38%
EPS 3Y9.11%
EPS 5Y4.98%
EPS Q2Q%-9.02%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y1.03%
Revenue growth 5Y0.86%
Sales Q2Q%5.25%
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 2.99% on average per year.
The Revenue is expected to grow by 3.63% on average over the next years.
EPS Next Y-3.64%
EPS Next 2Y1.25%
EPS Next 3Y2.7%
EPS Next 5Y2.99%
Revenue Next Year4.76%
Revenue Next 2Y3.82%
Revenue Next 3Y3.84%
Revenue Next 5Y3.63%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 14.19 indicates a correct valuation of JNJ.
Compared to the rest of the industry, the Price/Earnings ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 88.71% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.19. JNJ is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 13.59, the valuation of JNJ can be described as correct.
JNJ's Price/Forward Earnings ratio is rather cheap when compared to the industry. JNJ is cheaper than 83.33% of the companies in the same industry.
JNJ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.37, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.19 | ||
| Fwd PE | 13.59 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaper than 83.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, JNJ is valued cheaper than 86.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.86 | ||
| EV/EBITDA | 11.38 |
4.3 Compensation for Growth
The excellent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.85
EPS Next 2Y1.25%
EPS Next 3Y2.7%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.36%.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.09. JNJ pays more dividend than 93.55% of the companies in the same industry.
JNJ's Dividend Yield is a higher than the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
5.2 History
The dividend of JNJ is nicely growing with an annual growth rate of 9.96%!
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)9.96%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
JNJ pays out 79.71% of its income as dividend. 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.
DP79.71%
EPS Next 2Y1.25%
EPS Next 3Y2.7%
JOHNSON & JOHNSON
NYSE:JNJ (1/22/2025, 7:34:40 PM)
After market: 145.206 -0.06 (-0.04%)145.27
-2.88 (-1.94%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners72.88%
Inst Owner Change-0.08%
Ins Owners0.04%
Ins Owner Change-2.38%
Market Cap349.75B
Analysts74.67
Price Target179.2 (23.36%)
Short Float %0.68%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
Yearly Dividend4.46
Dividend Growth(5Y)9.96%
DP79.71%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.83%
Min EPS beat(2)3.37%
Max EPS beat(2)8.28%
EPS beat(4)3
Avg EPS beat(4)3.2%
Min EPS beat(4)-0.59%
Max EPS beat(4)8.28%
EPS beat(8)7
Avg EPS beat(8)4.22%
EPS beat(12)10
Avg EPS beat(12)3.31%
EPS beat(16)14
Avg EPS beat(16)4.28%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-0.37%
Max Revenue beat(2)0.38%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-1.06%
Max Revenue beat(4)0.82%
Revenue beat(8)4
Avg Revenue beat(8)-3.38%
Revenue beat(12)4
Avg Revenue beat(12)-11.37%
Revenue beat(16)7
Avg Revenue beat(16)-8.24%
PT rev (1m)-0.33%
PT rev (3m)2.09%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-20.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.77%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.19 | ||
| Fwd PE | 13.59 | ||
| P/S | 3.99 | ||
| P/FCF | 16.86 | ||
| P/OCF | 13.91 | ||
| P/B | 4.99 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.38 |
EPS(TTM)10.24
EY7.05%
EPS(NY)10.69
Fwd EY7.36%
FCF(TTM)8.62
FCFY5.93%
OCF(TTM)10.44
OCFY7.19%
SpS36.42
BVpS29.14
TBVpS-5.87
PEG (NY)N/A
PEG (5Y)2.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.24% | ||
| ROE | 20.93% | ||
| ROCE | 19.11% | ||
| ROIC | 16.28% | ||
| ROICexc | 19.33% | ||
| ROICexgc | 87.37% | ||
| OM | 27.57% | ||
| PM (TTM) | 16.74% | ||
| GM | 69.16% | ||
| FCFM | 23.66% |
ROA(3y)14.01%
ROA(5y)12%
ROE(3y)34.23%
ROE(5y)30.27%
ROIC(3y)14.68%
ROIC(5y)14.11%
ROICexc(3y)18.17%
ROICexc(5y)17.33%
ROICexgc(3y)73.37%
ROICexgc(5y)78.66%
ROCE(3y)17.59%
ROCE(5y)16.71%
ROICexcg growth 3Y-10%
ROICexcg growth 5Y-0.58%
ROICexc growth 3Y8.38%
ROICexc growth 5Y4.05%
OM growth 3Y4.66%
OM growth 5Y2.82%
PM growth 3Y32.32%
PM growth 5Y17.1%
GM growth 3Y1.74%
GM growth 5Y0.67%
F-Score4
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.72 | ||
| Debt/EBITDA | 1.06 | ||
| Cap/Depr | 60.4% | ||
| Cap/Sales | 5.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.92% | ||
| Profit Quality | 141.28% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 4.15 |
F-Score4
WACC10.99%
ROIC/WACC1.48
Cap/Depr(3y)55.87%
Cap/Depr(5y)52.76%
Cap/Sales(3y)4.99%
Cap/Sales(5y)4.66%
Profit Quality(3y)80.78%
Profit Quality(5y)102.26%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.38%
EPS 3Y9.11%
EPS 5Y4.98%
EPS Q2Q%-9.02%
EPS Next Y-3.64%
EPS Next 2Y1.25%
EPS Next 3Y2.7%
EPS Next 5Y2.99%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y1.03%
Revenue growth 5Y0.86%
Sales Q2Q%5.25%
Revenue Next Year4.76%
Revenue Next 2Y3.82%
Revenue Next 3Y3.84%
Revenue Next 5Y3.63%
EBIT growth 1Y-0.84%
EBIT growth 3Y5.73%
EBIT growth 5Y3.7%
EBIT Next Year13.78%
EBIT Next 3Y8.66%
EBIT Next 5Y7.7%
FCF growth 1Y16.95%
FCF growth 3Y-3.31%
FCF growth 5Y-0.31%
OCF growth 1Y16.55%
OCF growth 3Y-1.07%
OCF growth 5Y0.53%