JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:JNJ - US4781601046 - Common Stock
203.9 USD
+0.83 (+0.41%)
204.2 USD
+0.3 (+0.15%)
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
JNJ had positive earnings in the past year.
In the past year JNJ had a positive cash flow from operations.
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 13.03%. This is amongst the best in the industry. JNJ outperforms 93.75% of its industry peers.
JNJ has a better Return On Equity (31.69%) than 94.27% of its industry peers.
JNJ's Return On Invested Capital of 14.68% is amongst the best of the industry. JNJ outperforms 93.23% 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 13.48%.
| 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
With an excellent Profit Margin value of 27.26%, JNJ belongs to the best of the industry, outperforming 93.23% of the companies in the same industry.
JNJ's Profit Margin has declined in the last couple of years.
JNJ has a better Operating Margin (27.00%) than 92.71% of its industry peers.
In the last couple of years the Operating Margin of JNJ has grown nicely.
The Gross Margin of JNJ (68.14%) is better than 76.04% of its industry peers.
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.
The number of shares outstanding for JNJ has been reduced compared to 5 years ago.
The debt/assets ratio for JNJ is higher compared to a year ago.
2.2 Solvency
JNJ has an Altman-Z score of 4.74. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a Altman-Z score of 4.74. This is in the better half of the industry: JNJ outperforms 76.56% 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.
Looking at the Debt to FCF ratio, with a value of 2.34, JNJ belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
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: 65.10% 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 | 4.74 |
ROIC/WACC1.62
WACC9.09%
2.3 Liquidity
A Current Ratio of 1.07 indicates that JNJ should not have too much problems paying its short term obligations.
JNJ has a worse Current ratio (1.07) than 80.21% 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: 81.77% of the companies in the same industry are doing better.
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 | 1.07 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.37% over the past year.
JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
The Revenue has been growing slightly by 5.08% in the past 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)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
JNJ is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.38% yearly.
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
The Price/Earnings ratio is 19.64, which indicates a rather expensive current valuation of JNJ.
JNJ's Price/Earnings ratio is rather cheap when compared to the industry. JNJ is cheaper than 81.77% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.45. JNJ is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 17.50, which indicates a rather expensive current valuation of JNJ.
Compared to the rest of the industry, the Price/Forward Earnings ratio of JNJ indicates a somewhat cheap valuation: JNJ is cheaper than 78.65% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.46, JNJ is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.64 | ||
| Fwd PE | 17.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaper than 80.73% of the companies in the same industry.
JNJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. JNJ is cheaper than 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.06 | ||
| EV/EBITDA | 15.61 |
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)1.99
PEG (5Y)6.89
EPS Next 2Y8%
EPS Next 3Y7.66%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 2.56%.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 7.87. JNJ pays more dividend than 93.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, JNJ has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
5.2 History
The dividend of JNJ is nicely growing with an annual growth rate of 9.24%!
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
48.70% of the earnings are spent on dividend by JNJ. 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 2Y8%
EPS Next 3Y7.66%
203.9
+0.83 (+0.41%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners74.46%
Inst Owner Change-0.06%
Ins Owners0.04%
Ins Owner Change-0.9%
Market Cap491.06B
Revenue(TTM)92.15B
Net Income(TTM)25.12B
Analysts75.48
Price Target205.15 (0.61%)
Short Float %0.81%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
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)11.58%
PT rev (3m)13.86%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-1.85%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.64 | ||
| Fwd PE | 17.5 | ||
| P/S | 5.33 | ||
| P/FCF | 25.06 | ||
| P/OCF | 20.29 | ||
| P/B | 6.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.61 |
EPS(TTM)10.38
EY5.09%
EPS(NY)11.65
Fwd EY5.71%
FCF(TTM)8.14
FCFY3.99%
OCF(TTM)10.05
OCFY4.93%
SpS38.26
BVpS32.92
TBVpS-7.27
PEG (NY)1.99
PEG (5Y)6.89
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 | 4.74 |
F-Score5
WACC9.09%
ROIC/WACC1.62
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%.