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 194 industry peers in the Pharmaceuticals industry. While JNJ has a great profitability rating, 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. This makes JNJ very considerable 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.
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
With an excellent Return On Assets value of 11.72%, JNJ belongs to the best of the industry, outperforming 93.81% of the companies in the same industry.
JNJ's Return On Equity of 28.88% is amongst the best of the industry. JNJ outperforms 95.36% of its industry peers.
JNJ has a better Return On Invested Capital (13.57%) than 90.21% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for JNJ is in line with the industry average of 14.91%.
| 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
With an excellent Profit Margin value of 25.00%, JNJ belongs to the best of the industry, outperforming 95.88% of the companies in the same industry.
In the last couple of years the Profit Margin of JNJ has declined.
JNJ's Operating Margin of 25.61% is amongst the best of the industry. JNJ outperforms 91.75% of its industry peers.
JNJ's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 67.98%, JNJ is in the better half of the industry, outperforming 74.74% 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 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.
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.
The debt/assets ratio for JNJ is higher compared to a year ago.
2.2 Solvency
JNJ has an Altman-Z score of 4.17. This indicates that JNJ is financially healthy and has little risk of bankruptcy at the moment.
JNJ's Altman-Z score of 4.17 is fine compared to the rest of the industry. JNJ outperforms 77.32% of its industry peers.
The Debt to FCF ratio of JNJ is 2.74, which is a good value as it means it would take JNJ, 2.74 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 2.74, JNJ belongs to the best of the industry, outperforming 91.75% of the companies in the same industry.
A Debt/Equity ratio of 0.61 indicates that JNJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.61, JNJ is not doing good in the industry: 64.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | 4.17 |
ROIC/WACC1.34
WACC10.13%
2.3 Liquidity
A Current Ratio of 1.01 indicates that JNJ should not have too much problems paying its short term obligations.
With a Current ratio value of 1.01, JNJ is not doing good in the industry: 82.47% of the companies in the same industry are doing better.
JNJ has a Quick Ratio of 1.01. This is a bad value and indicates that JNJ is not financially healthy enough and could expect problems in meeting its short term obligations.
JNJ's Quick ratio of 0.76 is on the low side compared to the rest of the industry. JNJ is outperformed by 84.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
The earnings per share for JNJ have decreased by -4.58% in the last year.
Measured over the past 5 years, JNJ shows a small growth in Earnings Per Share. The EPS has been growing by 2.85% on average per year.
JNJ shows a small growth in Revenue. In the last year, the Revenue has grown by 4.68%.
JNJ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.60% yearly.
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
Based on estimates for the next years, JNJ will show a small growth in Earnings Per Share. The EPS will grow by 5.89% on average per year.
Based on estimates for the next years, JNJ will show a small growth in Revenue. The Revenue will grow by 3.87% on average per year.
EPS Next Y7.46%
EPS Next 2Y6.17%
EPS Next 3Y6.44%
EPS Next 5Y5.89%
Revenue Next Year5.2%
Revenue Next 2Y4.9%
Revenue Next 3Y4.76%
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.
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
The Price/Earnings ratio is 16.73, which indicates a correct valuation of JNJ.
Based on the Price/Earnings ratio, JNJ is valued cheaply inside the industry as 82.99% of the companies are valued more expensively.
JNJ is valuated rather cheaply when we compare the Price/Earnings ratio to 26.82, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 14.86 indicates a correct valuation of JNJ.
78.35% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.21, JNJ is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.73 | ||
| Fwd PE | 14.86 |
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 82.99% of the companies listed in the same industry.
JNJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. JNJ is cheaper than 81.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.73 | ||
| EV/EBITDA | 13.55 |
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 an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.24
PEG (5Y)5.87
EPS Next 2Y6.17%
EPS Next 3Y6.44%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.16%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.20, JNJ pays a better dividend. On top of this JNJ pays more dividend than 93.30% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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 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
JNJ pays out 53.34% of its income as dividend. 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 2Y6.17%
EPS Next 3Y6.44%
167.33
+2.59 (+1.57%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners74.05%
Inst Owner Change-0.37%
Ins Owners0.04%
Ins Owner Change-0.83%
Market Cap402.99B
Analysts72.41
Price Target173.37 (3.61%)
Short Float %0.76%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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)-0.02%
PT rev (3m)-0.39%
EPS NQ rev (1m)1.94%
EPS NQ rev (3m)0.52%
EPS NY rev (1m)0.16%
EPS NY rev (3m)0.71%
Revenue NQ rev (1m)2.64%
Revenue NQ rev (3m)4.49%
Revenue NY rev (1m)2.24%
Revenue NY rev (3m)2.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.73 | ||
| Fwd PE | 14.86 | ||
| P/S | 4.45 | ||
| P/FCF | 21.73 | ||
| P/OCF | 17.5 | ||
| P/B | 5.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.55 |
EPS(TTM)10
EY5.98%
EPS(NY)11.26
Fwd EY6.73%
FCF(TTM)7.7
FCFY4.6%
OCF(TTM)9.56
OCFY5.71%
SpS37.63
BVpS32.58
TBVpS-8.09
PEG (NY)2.24
PEG (5Y)5.87
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 | 4.17 |
F-Score4
WACC10.13%
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)-4.58%
EPS 3Y0.64%
EPS 5Y2.85%
EPS Q2Q%-1.77%
EPS Next Y7.46%
EPS Next 2Y6.17%
EPS Next 3Y6.44%
EPS Next 5Y5.89%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%5.77%
Revenue Next Year5.2%
Revenue Next 2Y4.9%
Revenue Next 3Y4.76%
Revenue Next 5Y3.87%
EBIT growth 1Y-6.86%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year24.74%
EBIT Next 3Y11.9%
EBIT Next 5Y7.92%
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%