JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock - Currency: USD
Taking everything into account, JNJ scores 6 out of 10 in our fundamental rating. JNJ was compared to 195 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. Finally 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.
JNJ had a positive operating cash flow in the past year.
In the past 5 years JNJ has always been profitable.
In the past 5 years JNJ always reported a positive cash flow from operatings.
1.2 Ratios
JNJ has a Return On Assets of 11.26%. This is amongst the best in the industry. JNJ outperforms 92.82% of its industry peers.
The Return On Equity of JNJ (27.92%) is better than 95.38% of its industry peers.
JNJ has a better Return On Invested Capital (13.67%) than 91.28% of its industry peers.
The Average Return On Invested Capital over the past 3 years for JNJ is in line with the industry average of 14.87%.
| Industry Rank | Sector 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%
1.3 Margins
With an excellent Profit Margin value of 24.41%, JNJ belongs to the best of the industry, outperforming 95.90% of the companies in the same industry.
JNJ's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 26.16%, JNJ belongs to the best of the industry, outperforming 91.79% of the companies in the same industry.
In the last couple of years the Operating Margin of JNJ has grown nicely.
JNJ's Gross Margin of 68.34% is fine compared to the rest of the industry. JNJ outperforms 75.38% of its industry peers.
In the last couple of years the Gross Margin of JNJ has remained more or less at the same level.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
JNJ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, JNJ has about the same amount of shares outstanding.
Compared to 5 years ago, JNJ has less shares outstanding
Compared to 1 year ago, JNJ has a worse debt to assets ratio.
2.2 Solvency
JNJ has an Altman-Z score of 4.07. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ has a Altman-Z score of 4.07. This is in the better half of the industry: JNJ outperforms 78.97% 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.
With an excellent Debt to FCF ratio value of 2.57, JNJ belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
JNJ has a Debt/Equity ratio of 0.63. This is a neutral value indicating JNJ is somewhat dependend on debt financing.
JNJ has a worse Debt to Equity ratio (0.63) than 64.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.57 | ||
| Altman-Z | 4.07 |
ROIC/WACC1.34
WACC10.18%
2.3 Liquidity
JNJ has a Current Ratio of 1.26. This is a normal value and indicates that JNJ is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.26, JNJ is doing worse than 77.44% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that JNJ should not have too much problems paying its short term obligations.
JNJ's Quick ratio of 1.03 is on the low side compared to the rest of the industry. JNJ is outperformed by 74.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.03 |
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%.
JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
JNJ shows a small growth in Revenue. In the last year, the Revenue has grown by 4.30%.
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 5.89% on average over the next years.
The Revenue is expected to grow by 3.87% on average over the next years.
EPS Next Y7.29%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
EPS Next 5Y5.89%
Revenue Next Year2.9%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.87%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.52 indicates a correct valuation of JNJ.
86.15% of the companies in the same industry are more expensive than JNJ, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of JNJ to the average of the S&P500 Index (27.45), we can say JNJ is valued slightly cheaper.
A Price/Forward Earnings ratio of 13.89 indicates a correct valuation of JNJ.
78.97% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.90. JNJ is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.52 | ||
| Fwd PE | 13.89 |
4.2 Price Multiples
84.62% of the companies in the same industry are more expensive than JNJ, based on the Enterprise Value to EBITDA ratio.
84.10% of the companies in the same industry are more expensive than JNJ, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.43 | ||
| EV/EBITDA | 11.8 |
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.
The excellent profitability rating of JNJ may justify a higher PE ratio.
PEG (NY)2.13
PEG (5Y)5.44
EPS Next 2Y6.02%
EPS Next 3Y6.39%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.42%. 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 4.12. JNJ pays more dividend than 93.85% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.24%
Div Incr Years34
Div Non Decr Years34
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.
JNJ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP54.76%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
156.01
+0.45 (+0.29%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners74.05%
Inst Owner Change0.55%
Ins Owners0.04%
Ins Owner Change-0.14%
Market Cap375.37B
Analysts72.41
Price Target173.41 (11.15%)
Short Float %0.68%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend4.91
Dividend Growth(5Y)9.24%
DP54.76%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.32%
Min EPS beat(2)0.68%
Max EPS beat(2)5.96%
EPS beat(4)4
Avg EPS beat(4)4.57%
Min EPS beat(4)0.68%
Max EPS beat(4)8.28%
EPS beat(8)7
Avg EPS beat(8)3.76%
EPS beat(12)11
Avg EPS beat(12)3.64%
EPS beat(16)14
Avg EPS beat(16)4.01%
Revenue beat(2)1
Avg Revenue beat(2)-0.01%
Min Revenue beat(2)-0.55%
Max Revenue beat(2)0.53%
Revenue beat(4)2
Avg Revenue beat(4)0%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)0.53%
Revenue beat(8)5
Avg Revenue beat(8)0.36%
Revenue beat(12)5
Avg Revenue beat(12)-6.08%
Revenue beat(16)6
Avg Revenue beat(16)-8.44%
PT rev (1m)-0.45%
PT rev (3m)0.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.73%
EPS NY rev (1m)0%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.7%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.52 | ||
| Fwd PE | 13.89 | ||
| P/S | 4.2 | ||
| P/FCF | 18.43 | ||
| P/OCF | 15.15 | ||
| P/B | 4.81 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.8 |
EPS(TTM)10.05
EY6.44%
EPS(NY)11.23
Fwd EY7.2%
FCF(TTM)8.47
FCFY5.43%
OCF(TTM)10.3
OCFY6.6%
SpS37.13
BVpS32.46
TBVpS-1.29
PEG (NY)2.13
PEG (5Y)5.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.26% | ||
| ROE | 27.92% | ||
| ROCE | 17.09% | ||
| ROIC | 13.67% | ||
| ROICexc | 18.54% | ||
| ROICexgc | 72.98% | ||
| OM | 26.16% | ||
| PM (TTM) | 24.41% | ||
| GM | 68.34% | ||
| FCFM | 22.8% |
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-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.57 | ||
| Debt/EBITDA | 1.61 | ||
| Cap/Depr | 60.47% | ||
| Cap/Sales | 4.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.81% | ||
| Profit Quality | 93.4% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.07 |
F-Score5
WACC10.18%
ROIC/WACC1.34
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)-3.92%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%2.21%
EPS Next Y7.29%
EPS Next 2Y6.02%
EPS Next 3Y6.39%
EPS Next 5Y5.89%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%
Revenue Next Year2.9%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.87%
EBIT growth 1Y-3.64%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year24.74%
EBIT Next 3Y11.9%
EBIT Next 5Y7.92%
FCF growth 1Y25.69%
FCF growth 3Y0.14%
FCF growth 5Y-0.08%
OCF growth 1Y21.06%
OCF growth 3Y1.2%
OCF growth 5Y0.72%