JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - US4781601046 - Common Stock
179.29 USD
+0.36 (+0.2%)
179.279 USD
-0.01 (-0.01%)
We assign a fundamental rating of 6 out of 10 to JNJ. JNJ was compared to 193 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 decent growth rate and is not valued too expensively. JNJ also has an excellent dividend rating. These ratings could make JNJ a good candidate for dividend investing.
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.
Each year in the past 5 years JNJ has been profitable.
JNJ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.72%, JNJ belongs to the top of the industry, outperforming 93.26% of the companies in the same industry.
JNJ has a Return On Equity of 28.88%. This is amongst the best in the industry. JNJ outperforms 94.30% of its industry peers.
The Return On Invested Capital of JNJ (13.57%) is better than 91.71% of its industry peers.
JNJ had an Average Return On Invested Capital over the past 3 years of 15.41%. This is in line with the industry average of 15.38%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.72% | ||
| ROE | 28.88% | ||
| ROIC | 13.57% |
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
JNJ has a Profit Margin of 25.00%. This is amongst the best in the industry. JNJ outperforms 94.82% of its industry peers.
In the last couple of years the Profit Margin of JNJ has declined.
JNJ has a Operating Margin of 25.61%. This is amongst the best in the industry. JNJ outperforms 92.75% of its industry peers.
JNJ's Operating Margin has improved in the last couple of years.
JNJ has a better Gross Margin (67.98%) than 75.65% of its industry peers.
JNJ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.61% | ||
| PM (TTM) | 25% | ||
| GM | 67.98% |
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.
JNJ has less shares outstanding than it did 5 years ago.
JNJ has a worse debt/assets ratio than last year.
2.2 Solvency
JNJ has an Altman-Z score of 4.32. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.32, JNJ is in the better half of the industry, outperforming 77.20% of the companies in the same industry.
JNJ has a debt to FCF ratio of 2.74. This is a good value and a sign of high solvency as JNJ would need 2.74 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.74, JNJ belongs to the top of the industry, outperforming 90.16% of the companies in the same industry.
A Debt/Equity ratio of 0.61 indicates that JNJ is somewhat dependend on debt financing.
JNJ has a worse Debt to Equity ratio (0.61) than 64.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | 4.32 |
ROIC/WACC1.31
WACC10.36%
2.3 Liquidity
JNJ has a Current Ratio of 1.01. 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 Current ratio (1.01) than 80.83% of its industry peers.
A Quick Ratio of 0.76 indicates that JNJ may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.76, JNJ is doing worse than 82.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
JNJ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.58%.
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 4.68% 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)-4.58%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%-1.77%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%5.77%
3.2 Future
The Earnings Per Share is expected to grow by 6.46% on average over the next years.
JNJ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.69% yearly.
EPS Next Y9.8%
EPS Next 2Y7.16%
EPS Next 3Y6.88%
EPS Next 5Y6.46%
Revenue Next Year5.18%
Revenue Next 2Y4.88%
Revenue Next 3Y4.76%
Revenue Next 5Y4.69%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.93, the valuation of JNJ can be described as rather expensive.
Based on the Price/Earnings ratio, JNJ is valued cheaper than 84.46% of the companies in the same industry.
JNJ is valuated rather cheaply when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 15.63 indicates a correct valuation of JNJ.
Based on the Price/Forward Earnings ratio, JNJ is valued a bit cheaper than 79.27% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of JNJ to the average of the S&P500 Index (22.81), we can say JNJ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.93 | ||
| Fwd PE | 15.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaply inside the industry as 82.90% of the companies are valued more expensively.
JNJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. JNJ is cheaper than 82.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.28 | ||
| EV/EBITDA | 14.48 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)1.83
PEG (5Y)6.29
EPS Next 2Y7.16%
EPS Next 3Y6.88%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 2.91%. Purely for dividend investing, there may be better candidates out there.
JNJ's Dividend Yield is rather good when compared to the industry average which is at 3.83. JNJ pays more dividend than 93.78% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
5.2 History
The dividend of JNJ is nicely growing with an annual growth rate of 9.24%!
JNJ has paid a dividend for at least 10 years, which is 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
5.3 Sustainability
53.34% 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.
DP53.34%
EPS Next 2Y7.16%
EPS Next 3Y6.88%
179.29
+0.36 (+0.2%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners73.87%
Inst Owner Change0.11%
Ins Owners0.04%
Ins Owner Change-4.82%
Market Cap431.79B
Analysts72.41
Price Target180.18 (0.5%)
Short Float %0.71%
Short Ratio2.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.91% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP53.34%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.13%
Min EPS beat(2)2.3%
Max EPS beat(2)5.96%
EPS beat(4)4
Avg EPS beat(4)4.31%
Min EPS beat(4)0.68%
Max EPS beat(4)8.28%
EPS beat(8)7
Avg EPS beat(8)3.3%
EPS beat(12)11
Avg EPS beat(12)3.74%
EPS beat(16)14
Avg EPS beat(16)3.64%
Revenue beat(2)2
Avg Revenue beat(2)1.73%
Min Revenue beat(2)0.53%
Max Revenue beat(2)2.92%
Revenue beat(4)3
Avg Revenue beat(4)0.82%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)2.92%
Revenue beat(8)5
Avg Revenue beat(8)0.4%
Revenue beat(12)6
Avg Revenue beat(12)-3.28%
Revenue beat(16)6
Avg Revenue beat(16)-8.51%
PT rev (1m)3.93%
PT rev (3m)3.44%
EPS NQ rev (1m)-0.16%
EPS NQ rev (3m)0.52%
EPS NY rev (1m)2.18%
EPS NY rev (3m)2.34%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)4.49%
Revenue NY rev (1m)2.11%
Revenue NY rev (3m)2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.93 | ||
| Fwd PE | 15.63 | ||
| P/S | 4.76 | ||
| P/FCF | 23.28 | ||
| P/OCF | 18.75 | ||
| P/B | 5.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.48 |
EPS(TTM)10
EY5.58%
EPS(NY)11.47
Fwd EY6.4%
FCF(TTM)7.7
FCFY4.3%
OCF(TTM)9.56
OCFY5.33%
SpS37.63
BVpS32.58
TBVpS-8.09
PEG (NY)1.83
PEG (5Y)6.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.72% | ||
| ROE | 28.88% | ||
| ROCE | 16.67% | ||
| ROIC | 13.57% | ||
| ROICexc | 15.56% | ||
| ROICexgc | 64.93% | ||
| OM | 25.61% | ||
| PM (TTM) | 25% | ||
| GM | 67.98% | ||
| FCFM | 20.47% |
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%
ROICexcg growth 3Y1.2%
ROICexcg 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-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | 2.74 | ||
| Debt/EBITDA | 1.56 | ||
| Cap/Depr | 60.06% | ||
| Cap/Sales | 4.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.1% | ||
| Profit Quality | 81.85% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 4.32 |
F-Score4
WACC10.36%
ROIC/WACC1.31
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)-4.58%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%-1.77%
EPS Next Y9.8%
EPS Next 2Y7.16%
EPS Next 3Y6.88%
EPS Next 5Y6.46%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%5.77%
Revenue Next Year5.18%
Revenue Next 2Y4.88%
Revenue Next 3Y4.76%
Revenue Next 5Y4.69%
EBIT growth 1Y-6.86%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year28.86%
EBIT Next 3Y12.85%
EBIT Next 5Y8.43%
FCF growth 1Y27.51%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y20.74%
OCF growth 3Y1.2%
OCF growth 5Y0.72%