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Is NYSE:JNJ suited for dividend investing?

By Mill Chart

Last update: Feb 21, 2024

Unearth the potential of JOHNSON & JOHNSON (NYSE:JNJ) as a dividend stock recommended by our stock screening tool. NYSE:JNJ maintains a robust financial footing and delivers a sustainable dividend. We'll delve into the details below.

Dividend Examination for NYSE:JNJ

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:JNJ was assigned a score of 7 for dividend:

  • JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.31. JNJ pays more dividend than 93.03% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 2.48, JNJ pays a bit more dividend than the S&P500 average.
  • 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 their dividend for at least 10 years, which is a reliable track record.
  • 34.25% of the earnings are spent on dividend by JNJ. This is a low number and sustainable payout ratio.

Health Assessment of NYSE:JNJ

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:JNJ has received a 6 out of 10:

  • JNJ has an Altman-Z score of 4.78. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
  • JNJ has a better Altman-Z score (4.78) than 79.60% of its industry peers.
  • The Debt to FCF ratio of JNJ is 1.90, which is an excellent value as it means it would take JNJ, only 1.90 years of fcf income to pay off all of its debts.
  • JNJ has a Debt to FCF ratio of 1.90. This is amongst the best in the industry. JNJ outperforms 92.54% of its industry peers.
  • JNJ has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
  • 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.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:JNJ, the assigned 7 is a significant indicator of profitability:

  • JNJ has a better Return On Assets (20.85%) than 97.01% of its industry peers.
  • The Return On Equity of JNJ (48.61%) is better than 97.01% of its industry peers.
  • The Return On Invested Capital of JNJ (17.33%) is better than 93.53% of its industry peers.
  • JNJ's Profit Margin of 39.58% is amongst the best of the industry. JNJ outperforms 98.01% of its industry peers.
  • JNJ's Profit Margin has improved in the last couple of years.
  • With an excellent Operating Margin value of 28.66%, JNJ belongs to the best of the industry, outperforming 94.53% of the companies in the same industry.
  • JNJ has a better Gross Margin (68.86%) than 74.63% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

Our latest full fundamental report of JNJ contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.



NYSE:JNJ (4/19/2024, 4:57:49 PM)

After market: 147.9 -0.01 (-0.01%)


+2.17 (+1.49%)

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