Best Dividend Stocks. Analyze the stocks with the best dividend, while also showing decent profitability and health.


JOHNSON & JOHNSON

New York Stock Exchange, Inc. / Health Care / Pharmaceuticals

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 198 industry peers in the Pharmaceuticals industry. JNJ has an excellent profitability rating, but there are some minor concerns on its financial health. JNJ has a correct valuation and a medium growth rate. JNJ also has an excellent dividend rating. These ratings would make JNJ suitable for dividend investing!


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

In the past year JNJ was profitable.
JNJ had a positive operating cash flow in the past year.
JNJ had positive earnings in each of the past 5 years.
JNJ had a positive operating cash flow in each of the past 5 years.
JNJ Yearly Net Income VS EBIT VS OCF VS FCFJNJ Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

1.2 Ratios

JNJ has a Return On Assets of 11.26%. This is amongst the best in the industry. JNJ outperforms 92.93% of its industry peers.
With an excellent Return On Equity value of 27.92%, JNJ belongs to the best of the industry, outperforming 94.95% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.67%, JNJ belongs to the top of the industry, outperforming 89.90% of the companies in the same industry.
JNJ had an Average Return On Invested Capital over the past 3 years of 15.41%. This is significantly below the industry average of 42.34%.
Industry RankSector Rank
ROA 11.26%
ROE 27.92%
ROIC 13.67%
ROA(3y)12.79%
ROA(5y)11.65%
ROE(3y)31.38%
ROE(5y)29.12%
ROIC(3y)15.41%
ROIC(5y)14.48%
JNJ Yearly ROA, ROE, ROICJNJ Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40 50

1.3 Margins

JNJ has a better Profit Margin (24.41%) than 95.45% of its industry peers.
In the last couple of years the Profit Margin of JNJ has declined.
Looking at the Operating Margin, with a value of 26.16%, JNJ belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of JNJ has grown nicely.
With a decent Gross Margin value of 68.34%, JNJ is doing good in the industry, outperforming 74.75% 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 RankSector Rank
OM 26.16%
PM (TTM) 24.41%
GM 68.34%
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%
JNJ Yearly Profit, Operating, Gross MarginsJNJ Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60

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5

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.
JNJ has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for JNJ has been reduced compared to 5 years ago.
JNJ has a worse debt/assets ratio than last year.
JNJ Yearly Shares OutstandingJNJ Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B 2.5B
JNJ Yearly Total Debt VS Total AssetsJNJ Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50B 100B 150B

2.2 Solvency

An Altman-Z score of 4.04 indicates that JNJ is not in any danger for bankruptcy at the moment.
JNJ's Altman-Z score of 4.04 is fine compared to the rest of the industry. JNJ outperforms 79.80% of its industry peers.
JNJ has a debt to FCF ratio of 2.57. This is a good value and a sign of high solvency as JNJ would need 2.57 years to pay back of all of its debts.
The Debt to FCF ratio of JNJ (2.57) is better than 91.92% of its industry peers.
JNJ has a Debt/Equity ratio of 0.63. This is a neutral value indicating JNJ is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.63, JNJ is doing worse than 63.13% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.63
Debt/FCF 2.57
Altman-Z 4.04
ROIC/WACC1.33
WACC10.3%
JNJ Yearly LT Debt VS Equity VS FCFJNJ Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.3 Liquidity

A Current Ratio of 1.26 indicates that JNJ should not have too much problems paying its short term obligations.
JNJ has a worse Current ratio (1.26) than 75.76% of its industry peers.
JNJ has a Quick Ratio of 1.03. This is a normal value and indicates that JNJ is financially healthy and should not expect problems in meeting its short term obligations.
JNJ has a worse Quick ratio (1.03) than 72.73% of its industry peers.
Industry RankSector Rank
Current Ratio 1.26
Quick Ratio 1.03
JNJ Yearly Current Assets VS Current LiabilitesJNJ Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

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4

3. Growth

3.1 Past

JNJ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.92%.
The Earnings Per Share has been growing slightly by 2.85% on average over the past years.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 4.30% 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)-3.92%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%2.21%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%

3.2 Future

The Earnings Per Share is expected to grow by 5.39% on average over the next years.
Based on estimates for the next years, JNJ will show a small growth in Revenue. The Revenue will grow by 3.54% on average per year.
EPS Next Y7.29%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
EPS Next 5Y5.39%
Revenue Next Year2.89%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.54%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.
JNJ Yearly Revenue VS EstimatesJNJ Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 20B 40B 60B 80B 100B
JNJ Yearly EPS VS EstimatesJNJ Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5 10

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6

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 15.22, JNJ is valued correctly.
86.36% of the companies in the same industry are more expensive than JNJ, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.82. JNJ is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 13.62 indicates a correct valuation of JNJ.
JNJ's Price/Forward Earnings ratio is rather cheap when compared to the industry. JNJ is cheaper than 80.81% of the companies in the same industry.
JNJ is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 15.22
Fwd PE 13.62
JNJ Price Earnings VS Forward Price EarningsJNJ Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

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 82.83% of the companies listed in the same industry.
85.35% of the companies in the same industry are more expensive than JNJ, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 18.06
EV/EBITDA 11.56
JNJ Per share dataJNJ EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates JNJ does not grow enough to justify the current Price/Earnings ratio.
JNJ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.09
PEG (5Y)5.34
EPS Next 2Y6.02%
EPS Next 3Y6.39%

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7

5. Dividend

5.1 Amount

JNJ has a Yearly Dividend Yield of 3.39%.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 4.20. JNJ pays more dividend than 93.94% of the companies in the same industry.
JNJ's Dividend Yield is a higher than the S&P500 average which is at 2.39.
Industry RankSector Rank
Dividend Yield 3.39%

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 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
JNJ Yearly Dividends per shareJNJ Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3 4

5.3 Sustainability

54.76% 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.
DP54.76%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
JNJ Yearly Income VS Free CF VS DividendJNJ Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B
JNJ Dividend Payout.JNJ Dividend Payout, showing the Payout Ratio.JNJ Dividend Payout.PayoutRetained Earnings

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