JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
USA - NYSE:JNJ - US4781601046 - Common Stock
186.57 USD
-0.4 (-0.21%)
186.67 USD
+0.1 (+0.05%)
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 192 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.
In the past year JNJ had a positive cash flow from operations.
Each year in the past 5 years JNJ has 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 13.03%. This is amongst the best in the industry. JNJ outperforms 93.75% of its industry peers.
The Return On Equity of JNJ (31.69%) is better than 94.27% of its industry peers.
JNJ has a better Return On Invested Capital (14.68%) than 93.23% of its industry peers.
JNJ had an Average Return On Invested Capital over the past 3 years of 15.41%. This is in line with the industry average of 15.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROIC | 14.68% |
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 27.26%. This is amongst the best in the industry. JNJ outperforms 95.83% 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 27.00%, JNJ belongs to the top of the industry, outperforming 92.71% of the companies in the same industry.
In the last couple of years the Operating Margin of JNJ has grown nicely.
Looking at the Gross Margin, with a value of 68.14%, JNJ is in the better half of the industry, outperforming 76.56% 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 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.
Compared to 5 years ago, JNJ has less shares outstanding
Compared to 1 year ago, JNJ has a worse debt to assets ratio.
2.2 Solvency
JNJ has an Altman-Z score of 4.52. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.52, JNJ is in the better half of the industry, outperforming 76.56% of the companies in the same industry.
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's Debt to FCF ratio of 2.34 is amongst the best of the industry. JNJ outperforms 91.67% of its industry peers.
A Debt/Equity ratio of 0.55 indicates that 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 64.58% 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 | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 4.52 |
ROIC/WACC1.61
WACC9.14%
2.3 Liquidity
A Current Ratio of 1.07 indicates that JNJ should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.07, JNJ is doing worse than 80.21% of the companies in the same industry.
A Quick Ratio of 0.80 indicates that JNJ may have some problems paying its short term obligations.
JNJ has a worse Quick ratio (0.80) than 80.73% 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 small growth in Earnings Per Share. In the last year, the EPS has grown by 1.37%.
Measured over the past 5 years, JNJ shows a small growth in Earnings Per Share. The EPS has been growing by 2.85% on average per year.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 5.08% in the last year.
JNJ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.60% yearly.
EPS 1Y (TTM)1.37%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%15.7%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%6.77%
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 7.38% on average per year.
The Revenue is expected to grow by 5.24% on average over the next years.
EPS Next Y9.86%
EPS Next 2Y8%
EPS Next 3Y7.66%
EPS Next 5Y7.38%
Revenue Next Year5.62%
Revenue Next 2Y5.45%
Revenue Next 3Y5.26%
Revenue Next 5Y5.24%
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 rather expensively with a Price/Earnings ratio of 17.97.
JNJ's Price/Earnings ratio is rather cheap when compared to the industry. JNJ is cheaper than 82.81% of the companies in the same industry.
JNJ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.83.
A Price/Forward Earnings ratio of 16.01 indicates a correct valuation of JNJ.
Compared to the rest of the industry, the Price/Forward Earnings ratio of JNJ indicates a rather cheap valuation: JNJ is cheaper than 81.25% of the companies listed in the same industry.
JNJ is valuated cheaply when we compare the Price/Forward Earnings ratio to 32.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 16.01 |
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 82.29% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, JNJ is valued cheaper than 82.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.93 | ||
| EV/EBITDA | 14.32 |
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)1.82
PEG (5Y)6.3
EPS Next 2Y8%
EPS Next 3Y7.66%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 2.78%.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 6.99. JNJ pays more dividend than 93.75% of the companies in the same industry.
JNJ's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
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 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
48.70% of the earnings are spent on dividend by JNJ. 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 2Y8%
EPS Next 3Y7.66%
186.57
-0.4 (-0.21%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners74.46%
Inst Owner Change-0.91%
Ins Owners0.04%
Ins Owner Change-0.61%
Market Cap449.32B
Revenue(TTM)92.15B
Net Income(TTM)25.12B
Analysts75.48
Price Target204.02 (9.35%)
Short Float %0.86%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.78% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP48.7%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.42%
Min EPS beat(2)0.55%
Max EPS beat(2)2.3%
EPS beat(4)4
Avg EPS beat(4)2.37%
Min EPS beat(4)0.55%
Max EPS beat(4)5.96%
EPS beat(8)7
Avg EPS beat(8)2.79%
EPS beat(12)11
Avg EPS beat(12)3.6%
EPS beat(16)14
Avg EPS beat(16)3.08%
Revenue beat(2)2
Avg Revenue beat(2)1.48%
Min Revenue beat(2)0.03%
Max Revenue beat(2)2.92%
Revenue beat(4)3
Avg Revenue beat(4)0.74%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)2.92%
Revenue beat(8)5
Avg Revenue beat(8)0.34%
Revenue beat(12)7
Avg Revenue beat(12)-2.01%
Revenue beat(16)7
Avg Revenue beat(16)-8.34%
PT rev (1m)10.96%
PT rev (3m)13.58%
EPS NQ rev (1m)-1.61%
EPS NQ rev (3m)-1.71%
EPS NY rev (1m)0.05%
EPS NY rev (3m)2.23%
Revenue NQ rev (1m)0.33%
Revenue NQ rev (3m)0.39%
Revenue NY rev (1m)0.37%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.97 | ||
| Fwd PE | 16.01 | ||
| P/S | 4.88 | ||
| P/FCF | 22.93 | ||
| P/OCF | 18.56 | ||
| P/B | 5.67 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.32 |
EPS(TTM)10.38
EY5.56%
EPS(NY)11.65
Fwd EY6.25%
FCF(TTM)8.14
FCFY4.36%
OCF(TTM)10.05
OCFY5.39%
SpS38.26
BVpS32.92
TBVpS-7.27
PEG (NY)1.82
PEG (5Y)6.3
Graham Number87.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.03% | ||
| ROE | 31.69% | ||
| ROCE | 17.53% | ||
| ROIC | 14.68% | ||
| ROICexc | 16.82% | ||
| ROICexgc | 69.32% | ||
| OM | 27% | ||
| PM (TTM) | 27.26% | ||
| GM | 68.14% | ||
| FCFM | 21.27% |
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%
ROICexgc growth 3Y1.2%
ROICexgc 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 Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 62.36% | ||
| Cap/Sales | 5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.02% | ||
| Profit Quality | 78.02% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 4.52 |
F-Score5
WACC9.14%
ROIC/WACC1.61
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)1.37%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%15.7%
EPS Next Y9.86%
EPS Next 2Y8%
EPS Next 3Y7.66%
EPS Next 5Y7.38%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%6.77%
Revenue Next Year5.62%
Revenue Next 2Y5.45%
Revenue Next 3Y5.26%
Revenue Next 5Y5.24%
EBIT growth 1Y2.89%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year28.57%
EBIT Next 3Y12.7%
EBIT Next 5Y8.85%
FCF growth 1Y24.53%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y19.36%
OCF growth 3Y1.2%
OCF growth 5Y0.72%
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 for JNJ stock?
ChartMill assigns a valuation rating of 6 / 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.
What is the financial health of JOHNSON & JOHNSON (JNJ) stock?
The financial health rating of JOHNSON & JOHNSON (JNJ) is 6 / 10.
How sustainable is the dividend of JOHNSON & JOHNSON (JNJ) stock?
The dividend rating of JOHNSON & JOHNSON (JNJ) is 6 / 10 and the dividend payout ratio is 48.7%.