Johnson & Johnson (NYSE:JNJ) – A Reliable Dividend Stock Worth Considering

Johnson & Johnson (NYSE:JNJ) stands out as a strong candidate for dividend investors, according to our Best Dividend Stocks screener. The company combines a solid dividend profile with healthy profitability and reasonable financial health, making it a compelling option for income-focused investors.

Dividend Strength

• Attractive Yield: JNJ offers a dividend yield of 3.33%, which is above the S&P 500 average of 2.37%. It also outperforms 93.85% of its pharmaceutical industry peers in terms of yield.
• Consistent Growth: The company has increased its dividend for at least 10 consecutive years, with an annualized growth rate of 9.24% over the past five years.
• Reliable Track Record: JNJ has maintained dividend payments without cuts for over a decade, demonstrating stability even in uncertain market conditions.

Profitability & Financial Health

• Strong Profit Margins: JNJ’s Profit Margin (24.41%) and Operating Margin (26.16%) rank among the best in the industry, outperforming over 90% of peers.
• Solid Return Metrics: The company delivers a Return on Equity (27.92%) and Return on Invested Capital (13.67%) that are well above industry averages.
• Moderate Financial Health: While JNJ’s Debt-to-Equity ratio (0.63) is slightly higher than some competitors, its Altman-Z score (4.07) indicates low bankruptcy risk. Liquidity metrics, such as the Current Ratio (1.26), remain adequate.

Valuation & Growth Outlook

• Reasonable Valuation: Trading at a P/E ratio of 15.50, JNJ is cheaper than 87% of its industry peers. Its Price/Free Cash Flow ratio also suggests undervaluation relative to competitors.
• Stable Growth Prospects: Revenue and earnings growth are expected to improve modestly, with forward estimates pointing to 5.89% annual EPS growth and 3.87% revenue growth.

For a deeper look at JNJ’s fundamentals, review the full fundamental report here.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.