Johnson & Johnson (NYSE:JNJ) stands out as a strong candidate for dividend investors, according to our Best Dividend Stocks screen. The company combines a solid dividend profile with decent profitability and financial health, making it a potentially attractive option for income-focused portfolios.
Dividend Strength
- Dividend Yield: JNJ offers a 3.39% yield, which is above the S&P 500 average of 2.40% and better than 93.91% of its pharmaceutical industry peers.
- Dividend Growth: The company has consistently increased its dividend, with an annual growth rate of 9.24% over the past five years.
- Reliability: JNJ has paid dividends for at least 10 years without any reductions, demonstrating a strong commitment to shareholders.
- Payout Ratio: At 54.76%, the payout ratio is slightly elevated but remains manageable, though investors should monitor earnings growth sustainability.
Profitability & Financial Health
- Profitability Rating (7/10): JNJ excels in profitability, with a Return on Equity (ROE) of 27.92% and a Profit Margin of 24.41%, outperforming most industry competitors.
- Health Rating (5/10): While the company maintains a stable financial position, its Current Ratio (1.26) and Quick Ratio (1.03) are below industry averages, indicating moderate liquidity concerns. However, its Altman-Z score (4.04) suggests low bankruptcy risk.
Valuation
- Price/Earnings (P/E): JNJ trades at a P/E of 15.22, below the S&P 500 average (25.91) and cheaper than 86.29% of its industry peers.
- Price/Free Cash Flow: The stock is attractively valued based on cash flow, trading cheaper than 85.28% of competitors.
For a deeper look, review the full fundamental report on JNJ.
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Disclaimer
This is not investing advice. Always conduct your own research before making investment decisions.
