JOHNSON & JOHNSON (JNJ) Stock Fundamental Analysis
NYSE:JNJ - New York Stock Exchange, Inc. - US4781601046 - Common Stock - Currency: USD
Overall JNJ gets a fundamental rating of 6 out of 10. We evaluated JNJ against 198 industry peers in the Pharmaceuticals industry. While JNJ has a great profitability rating, there are some minor concerns on its financial health. JNJ is not valued too expensively and it also shows a decent growth rate. 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.
JNJ had a positive operating cash flow in the past year.
JNJ had positive earnings in each of the past 5 years.
Each year in the past 5 years JNJ had a positive operating cash flow.
1.2 Ratios
JNJ has a better Return On Assets (11.26%) than 93.43% of its industry peers.
JNJ's Return On Equity of 27.92% is amongst the best of the industry. JNJ outperforms 94.95% of its industry peers.
With an excellent Return On Invested Capital value of 13.67%, JNJ belongs to the best of the industry, outperforming 89.90% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for JNJ is significantly below the industry average of 41.51%.
| 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
Looking at the Profit Margin, with a value of 24.41%, JNJ belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
JNJ's Profit Margin has declined in the last couple of years.
The Operating Margin of JNJ (26.16%) is better than 90.91% of its industry peers.
In the last couple of years the Operating Margin of JNJ has grown nicely.
Looking at the Gross Margin, with a value of 68.34%, JNJ is in the better half of the industry, outperforming 73.74% 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 | 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.
The number of shares outstanding for JNJ remains at a similar level compared to 1 year ago.
Compared to 5 years ago, JNJ has less shares outstanding
The debt/assets ratio for JNJ is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.98 indicates that JNJ is not in any danger for bankruptcy at the moment.
JNJ has a better Altman-Z score (3.98) than 79.29% of its industry peers.
The Debt to FCF ratio of JNJ is 2.57, which is a good value as it means it would take JNJ, 2.57 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 2.57, JNJ belongs to the best of the industry, outperforming 91.92% of the companies in the same industry.
A Debt/Equity ratio of 0.63 indicates that JNJ is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.63, JNJ is not doing good in the industry: 64.14% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.57 | ||
| Altman-Z | 3.98 |
ROIC/WACC1.33
WACC10.3%
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 Current ratio of 1.26. This is amonst the worse of the industry: JNJ underperforms 80.30% of its industry peers.
A Quick Ratio of 1.03 indicates that JNJ should not have too much problems paying its short term obligations.
JNJ has a worse Quick ratio (1.03) than 75.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
The earnings per share for JNJ have decreased by -3.92% in the last year.
JNJ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.85% yearly.
Looking at the last year, JNJ shows a small growth in Revenue. The Revenue has grown by 4.30% in the last 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)-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.
JNJ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.54% yearly.
EPS Next Y6.71%
EPS Next 2Y5.78%
EPS Next 3Y6.08%
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.
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
JNJ is valuated correctly with a Price/Earnings ratio of 14.56.
Based on the Price/Earnings ratio, JNJ is valued cheaply inside the industry as 85.35% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.85, JNJ is valued a bit cheaper.
A Price/Forward Earnings ratio of 13.09 indicates a correct valuation of JNJ.
82.83% of the companies in the same industry are more expensive than JNJ, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of JNJ to the average of the S&P500 Index (20.89), we can say JNJ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.56 | ||
| Fwd PE | 13.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, JNJ is valued cheaper than 83.33% of the companies in the same industry.
JNJ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. JNJ is cheaper than 85.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.29 | ||
| EV/EBITDA | 11.21 |
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)2.17
PEG (5Y)5.11
EPS Next 2Y5.78%
EPS Next 3Y6.08%
5. Dividend
5.1 Amount
JNJ has a Yearly Dividend Yield of 3.34%. 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 4.19. JNJ pays more dividend than 93.94% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, JNJ pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
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
JNJ pays out 54.76% of its income as dividend. 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 2Y5.78%
EPS Next 3Y6.08%
146.36
-2.08 (-1.4%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners73.73%
Inst Owner Change-0.01%
Ins Owners0.04%
Ins Owner Change-0.11%
Market Cap352.15B
Analysts74
Price Target174.19 (19.01%)
Short Float %0.82%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
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)0.69%
PT rev (3m)0.5%
EPS NQ rev (1m)0.76%
EPS NQ rev (3m)-1.68%
EPS NY rev (1m)-0.36%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)0.63%
Revenue NY rev (3m)1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.56 | ||
| Fwd PE | 13.09 | ||
| P/S | 3.94 | ||
| P/FCF | 17.29 | ||
| P/OCF | 14.21 | ||
| P/B | 4.51 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.21 |
EPS(TTM)10.05
EY6.87%
EPS(NY)11.18
Fwd EY7.64%
FCF(TTM)8.47
FCFY5.78%
OCF(TTM)10.3
OCFY7.04%
SpS37.13
BVpS32.46
TBVpS-1.29
PEG (NY)2.17
PEG (5Y)5.11
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 | 3.98 |
F-Score5
WACC10.3%
ROIC/WACC1.33
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 Y6.71%
EPS Next 2Y5.78%
EPS Next 3Y6.08%
EPS Next 5Y5.39%
Revenue 1Y (TTM)4.3%
Revenue growth 3Y4.1%
Revenue growth 5Y1.6%
Sales Q2Q%2.39%
Revenue Next Year2.89%
Revenue Next 2Y3.52%
Revenue Next 3Y3.79%
Revenue Next 5Y3.54%
EBIT growth 1Y-3.64%
EBIT growth 3Y4.44%
EBIT growth 5Y4.79%
EBIT Next Year20.06%
EBIT Next 3Y12.36%
EBIT Next 5Y7.4%
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%