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Johnson & Johnson: Still A Great Income Stock, If A Bit Expensive
- JNJ's valuation has become a bit stretched.
- The stock's record of income is still one of the best out there.
- I like JNJ at $100 or less for its steady dividend raises and earnings visibility.
Johnson & Johnson's Immunology Pipeline Is Golden
- Stelara, already a blockbuster, is in three Phase 3 studies, with two completed, in Crohn's disease, a $4-5 billion market with few options for patients.
- Sirukumab is in the same class as blockbuster Actemra, and could bite into the $14 billion rheumatoid arthritis (RA) market by beating Humira in a head-to-head Phase 3 trial.
- CNTO 6785 is the x-factor with two Phase 2 trials (in RA and COPD) completing next year.
Johnson & Johnson: Moderate Upside Led By Pharmaceutical Division
- New pharmaceutical products driving growth.
- Consumer and MD&D products stable but have weak growth prospects.
- Levered Returns Model shows moderate upside of 9%.
Dividend Aristocrats In Focus Part 52 Of 54: Johnson & Johnson
- Johnson & Johnson has increased EPS for 30 consecutive years and dividends per share for 52 consecutive years.
- Johnson & Johnson's stock is less volatile than most utilities.
- The company is extremely well-diversified and has 4 separate competitive advantages.
Johnson & Johnson: Does The Dividend Blue Chip Remain Attractive?
- Based on my free cash flow forecasts, JNJ can comfortably sustain a 6% annual dividend growth in the next few years.
- A 2-stage dividend discount model suggests that the stock is now fairly valued at $109.
- As there is insufficient upside potential and dividend yield is at 5-year low, a hold rating is warranted.
- Share prices generally fall on the day the shares go ex dividend.
- Share prices are mostly higher at the dividend pay date than at the ex dividend date.
- For DRIP shareholders, shares are generally purchased by the company on market at the dividend pay date, for assigning to shareholders in lieu of paying the cash dividend.
- Could these on market purchases be inflating share prices on the dividend pay date to the detriment of DRIP investors?
- Modeling of the alternatives, using Johnson & Johnson for the ten years 2003 to 2014 as an example, provides a fair guide to the answer.
Long-Term Dividend Investors Should Use Historic Yield To Find Hidden Value
- After identifying a great company, take a look at historic yield.
- Use the 10 year average to enhance total return and dividends.
- This method can be a quick way of determining when pricing is in your favor on dividend growth investments.
Update: FDA Clears Johnson & Johnson's Insulin Pump, An Artificial Pancreas Quickened
- Animas, a Johnson & Johnson unit, has won FDA approval for its Animas Vibe insulin pump.
- In my original article, I said that Johnson & Johnson's artificial pancreas may be launched much earlier than expected.
- The FDA clearance of the Animas Vibe insulin pump affirms my view.
How Much Do Fair-Value Estimates Help The Retail Investor?
- Fair-value estimates for Johnson & Johnson lead to a range of numbers that seems too wide to form a helpful basis for planning trades.
- If we use market-price patterns, focus on their most frequently traded value (the mode), along with their pattern of concentration around that mode, during the period of observation.
- I find that at least 85% of JNJ trading prices during a given month tend to lie within two mean deviations from the mode.
- This information can be helpful in forecasting the "high probability price zone" for JNJ in the month ahead.
- JNJ is suitable for the Enterprising Investor following the ModernGraham approach.
- According to the ModernGraham valuation model, the company is overvalued at the present time.
- The market is implying 6.87% earnings growth over the next 7-10 years, which is well above the company's actual growth in recent years.
- J&J sports a healthy yield of 2.6% and payout ratio of only 45%.
- J&J has paid and raised a dividend for over 51 years.
- J&J is a member of the Dividend Aristocrats, which can be counted on for yearly dividend increases.
Johnson & Johnson Vs. BP: Ignore Dividend Growth Rate At Your Own Peril
- This article gives you a hypothetical option to choose between JNJ and BP for a dividend reinvestment strategy for growing an income stream dating back to 2003.
- Comparing raw data sets, either actual historical or projected, between two alternatives in order to select the preferred option requires more than intuition -- it requires modeling.
- A higher dividend growth rate is a powerful antidote to a lower initial dividend yield.
Johnson & Johnson Takes Care Of Both Consumers And Stockholders
- Johnson & Johnson is a well-established company founded in the 19th century and is one of the largest companies in the U.S.
- Multiple divisions of the company focus efforts across a wide range of personal care, drugs and medical equipment products.
- Johnson & Johnson is part of an elite group whose stocks have risen steadily for decades.
- Competition is increasing in drug markets as the company seeks to maintain its leadership across a wide variety of fields.
- The company has proven to be a stable and safe bet for investors with a long history of increasing profits and dividends.
- This article gives you a hypothetical option to choose between BP and JNJ for dividend income dating back to 2003.
- The results may surprise you, given the bullet points you might know about each company.
- In the end, a higher yield can make up for many income blunders.
Johnson & Johnson DGI Trumps Pure Income Vanguard Wellington Part II
- Johnson & Johnson’s strong performance over the last 20 years, together with the power of dividend reinvestment, enabled it to massively outperform pure income investment Vanguard Wellington Income Fund.
- But Johnson & Johnson’s current earnings and dividend growth rates are far below the averages for its earnings and dividend growth over the past 20 years.
- How might total returns from a Pure Income investment in Vanguard Wellington (VWELX), compare to an investment in Johnson & Johnson (JNJ) over the next 32 years?
- Would it be viable in the future to sell JNJ shares, to match income withdrawals from a pure income investment in VWELX, and still grow the JNJ investment?
Johnson & Johnson Part VII: 'Magic Pants' And 'Doubling Pennies' Continued
- Gain an understanding how total yearly dividend growth from an investment in Johnson & Johnson stock would be impacted by lower earnings and dividend growth rates.
- Learn how total yearly dividend growth from an investment in Johnson & Johnson stock would be impacted by a lower earnings growth rate but with dividend growth maintained.
- See how changes in earnings and dividend growth rates do not necessarily have similar favorable or unfavorable effects on ending investment values and yearly dividend amounts.
Johnson & Johnson Part VI: 'Magic Pants' And 'Doubling Pennies'
- Gain an understanding how return on investment in Johnson & Johnson would be impacted by lower earnings and dividend growth rates.
- See how return on investment in Johnson & Johnson would be impacted by lower earnings growth rates but with rate of dividend growth maintained.
- I give my take on the “Magic Pants” analogy, explaining how an investment at a yield of less than 3%, can result in rates of return of 10% and above.
Is Johnson & Johnson A Stock Worth Having In The Portfolio Right Now?
- This is no doubt a stalwart of a company, but the earnings growth expectations are pretty small.
- The dividend a solid 2.5% yield, but with no earnings growth expectations I'd like to see a higher yielding dividend in the name.
- I'm going to take a pass on the name for now and keep searching, but if it drops in price I'll definitely be looking at it again.
Johnson & Johnson Seeks Further Expansion, As China Opens Its Doors To Foreign Investment
- JNJ recently announced its intention to expand its business in China.
- This is well-timed, given China’s opening to greater foreign investment, and increasing demand for healthcare.
- JNJ’s consistent, strong results have allowed the company freedom to explore this expansion.
- We continue to be very optimistic on JNJ, moving forward into 2015.
Johnson & Johnson's Ebola Vaccine Will Lift International Sales For The Company
- Johnson & Johnson has committed to spending nearly $200 million on the development of a cure for the Ebola virus, that has claimed the lives of over 4000 people.
- The company is known to have received direct funding from the NIAID. It will also be using technology from Bavarian Nordic in a $187 million deal.
- The third quarter results noted increases in sales. International sales declined marginally during the quarter. Net income and earnings increased rapidly.
- Johnson & Johnson could face stiff competition from GlaxoSmithKline, which is already conducting clinical trials. But the development of the vaccine could lift international sales for the company.
- Investment in Johnson & Johnson is a fairly stable investment that is likely to show growth in the future periods. It offers a reasonable dividend yield of 2.60%.
Tue, Feb. 4, 8:28 AM
- Ten major pharmaceuticals companies are getting together with the National Institutes of Health and other organizations in a five-year partnership that will look to understand the science behind Alzheimer's, Type 2 diabetes, rheumatoid arthritis and lupus.
- In an unusual move, the normally secretive participants will share scientists, tissue, blood samples and data, with the aim being to identify targets for new drugs.
- The firms involved include Bristol-Myers Squibb (BMY), Johnson & Johnson (JNJ), GlaxoSmithKline (GSK), Takeda (TKPHF) and Sanofi (SNY).
- Those that haven't joined include Amgen (AMGN), Roche (RHHBY) and AstraZeneca (AZN).
Thu, Jan. 30, 9:31 AM
- Johnson & Johnson (JNJ) has become the latest major pharmaceutical firm to say that it will make more data from its clinical trials available to researchers.
- JNJ has signed an agreement with Yale University to share information about hundreds of drugs and other products.
- Yale will vet requests from researchers without input from J&J.
- Part of the idea is to increase the credibility of the data. "The medical scientific community and population at large want to have more transparency on what we do," says J&J's Paul Stoffels. "To get really credible, we took the leap."
- Other big pharma companies to pledge to release data in the past year include GSK and Roche. (PR)
Tue, Jan. 28, 5:15 PM
- Medivation (MDVN) +8.2% AH after its Xtandi drug for advanced prostate cancer was found to significantly delay progression of the disease and extend survival in a large, late stage study of patients who had not yet received chemotherapy.
- Xtandi (enzalutamide) already is approved to treat patients whose prostate cancer has spread and who had previously been treated with chemotherapy; approval for use prior to chemo could greatly expand the available patient population, significantly boost sales, and enable the drug to compete with Johnson & Johnson's (JNJ) Zytiga.
- Sanford Bernstein says annual Xtandi sales eventually could exceed $3B with a pre-chemo approval.
Tue, Jan. 21, 11:36 AM
- Lower today amid a disappointing full year outlook, Johnson & Johnson (JNJ -1.7%) is a buy on the dip says RBC's Glen Novarro. The weak early-year guidance sets management up to beat and raise throughout 2014. "We continue to recommend [J&J] based on strong growth in pharmaceuticals and under-appreciated operating margins."
- Earlier: Management guides to full-year EPS of $5.75-$5.85 vs. consensus $5.86.
Tue, Jan. 21, 8:01 AM
- J&J (JNJ +0.85%) Q4 net profit $3.52B vs $2.57B a year earlier.
- Domestic sales +7.4%, international sales +2.4%
- 2013 results were "led by the outstanding performance in our pharmaceutical business, the strength of key brands in our U.S. OTC and other consumer businesses, and continued progress in integrating Synthes into our Medical Devices and Diagnostics business," says J&J CEO Alex Gorsky.
- J&J expects 2014 EPS of $5.75-5.85 vs consensus of $5.85. (PR)
Tue, Jan. 21, 7:46 AM| 10 Comments
Tue, Jan. 21, 12:05 AM
Mon, Jan. 20, 5:30 PM
Thu, Jan. 16, 4:06 PM
Thu, Jan. 16, 8:01 AM
- Carlyle (CG) confirms that it has agreed to acquire Johnson & Johnson's (JNJ +0.3%) Ortho-Clinical Diagnostics (OCD) business for $4.15B.
- "This transaction is a result of our disciplined approach to portfolio management in order to achieve the greatest value for Johnson & Johnson," J&J CEO Alex Gorsky says.
- OCD provides products for screening, diagnosing, monitoring and confirming diseases, including blood-screening equipment and laboratory blood tests. It's a smallish player in a market led by Roche, Siemens and Abbott Labs. (PR)
Tue, Jan. 14, 9:45 AM
- The FDA expresses skepticism that Johnson & Johnson's (JNJ) anticoagulant Xarelto (rivaroxaban) is effective in cutting the risk of additional heart problems in heart-attack patients.
- J&J has recommended that Xarelto, which is already authorized for other uses, be administered in the 90 days after an attack.
- However, the FDA doesn't see the point. "Not only does the effect of rivaroxaban not appear to be greater earlier, but an effect in the first 90 days or so is not apparent at all," the agency says in a review.
- The FDA's comments come two days before an advisory panel is due to discuss whether to recommend Xarelto for this indication.
- Bayer (BAYRY) co-markets Xarelto.
Mon, Jan. 13, 5:08 PM
- Carlyle Group (CG) is preparing $3.7B in financing that will back its purchase of Johnson & Johnson's (JNJ) ortho clinical diagnostics unit in a deal expected to be signed by the end of this week, Reuters reports.
- Including equity and $3.3B in funded debt, sources peg the offer price in the $4.1B-$4.5B range.
- Reports last month said Carlyle was nearing a ~$4B deal for the unit; the P-E firm's exclusivity period on the deal is said to end Jan. 17.
Fri, Jan. 10, 10:43 AM
- Ironwood Pharmaceuticals (IRWD +4.9%) upgraded to Outperform from Market Perform at BMO. Price target is $16.
- Bristol-Myers Squibb (BMY +0.7%) upgraded to Overweight from Equalweight at Barclays. Price target hiked to $65 from $52.
- Sequenom (SQNM -3.4%) cut to Neutral from Overweight at Piper. Price target is $2.50.
- BioMarin (BMRN -2.2%) cut to Equalweight from Overweight at Barclays. Price target is $73.
- Johnson & Johnson (JNJ -0.5%) cut to Equalweight from Overweight at Barclays. Price target is $99.
- Pfizer (PFE -0.6%) cut to Market Perform at Cowen. Price target is $34.
- Eli Lilly (LLY -0.4%) downgraded to Underweight from Equalweight at Barclays. Price target cut to $51 from $58.
- H.C. Wainwright starts Celsion (CLSN +7.7%) at Buy. Price target is $8.
- Orexigen (OREX +1.1%) initiated at Buy with a $9 target at Wallachbeth.
Thu, Jan. 9, 11:08 AM
- The current price offers a great entry point, says the team, led by Jeffrey Holford, upgrading to Buy with price target lifted to $108 from $102.
- Execution in pharmaceuticals remains strong and will be supplemented by new "underappreciated" launches like Imbruvica.
- The consumer division should be in recovery mode now that manufacturing issues are in the rear-view mirror. The MD&D division looks good thanks to the Synthes acquisition.
- Valuation - a 2% premium to the board market based on 2015 estimates - looks particularly cheap to the team, as JNJ typically rates a 10-15% premium.
Thu, Jan. 9, 9:06 AM
- Johnson & Johnson (JNJ) plans to appeal a ruling by China's State Administration for Industry & Commerce (SAIC) to cancel the company's exclusive rights to the trademark for its OneTouch diabetes monitoring products.
- If upheld, SAIC's decision could pave the way for competitors to sell rival and cheaper products under the same name.
- China has around 100M diabetes sufferers, the largest number in the world.
- Separately, J&J has asked the FDA to require that biosimilars, which are copies of biological treatments, bear a similar but not identical name to reference therapies.
- In contrast, Novartis and Mylan want biosimilars to use the same international non-proprietary name.
Tue, Jan. 7, 9:58 AM
- BofA upgrades Perrigo (PRGO +1.2%) to Buy from Neutral. RBC starts the shares as a Top Pick, with a $187 price target.
- BofA upgrades Becton Dickinson (BDX +0.8%) to Neutral from Underperform.
- RBC upgrades Johnson & Johnson (JNJ +1.6%) to Outperform from Sector Perform. Price target is $104.
- Citi upgrades Varian Medical (VAR +1.6%) to Neutral from Sell.
- Roth starts ANI Pharma (ANIP +9.5%) at Buy. Price target is $27.
- RBC starts Teva (TEVA +0.1%) at Sector Perform. Price target is $39.
- RBC starts AcelRx (ACRX +2.5%) at Outperform. Price target is $15.
- RBC starts Mylan (MYL +2.3%) at Outperform. Price target is $50.
- RBC starts Allergan (AGN +1.3%) at Outperform. Price target is $131.
- RBC starts Impax Labs (IPXL +0.2%) at Sector Perform. Price target is $25.
JNJ vs. ETF Alternatives
Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the health care field within its Consumer, Pharmaceutical and Medical Devices, and Diagnostics business segments.
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