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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, Sep. 30, 8:45 AM
- Johnson & Johnson (NYSE:JNJ) acquires privately-held clinical stage biopharmaceutical firm Alios BioPharma for $1.75B in cash.
- Alios develops therapies for viral diseases. Its lead product is AL-8176, an orally administered antiviral therapy in Phase 2 clinicals for the treatment of infants with respiratory syncytial virus (RSV).
- Janssen Pharmaceuticals R&D Chief William N Hait, M.D., Ph.D. says, "We are excited that this acquisition will enable us to explore treatment options for a number of viral infections, including RSV, the last of the major pediatric diseases with no available preventive therapy."
Thu, Sep. 25, 11:21 AM
- Epirus Biopharmaceuticals (EPRS -0.7%) consummates a collaboration agreement with Guangdong-based Livzon Mabpharm to develop, manufacture and commercialize up to five biosimilar products.
- The first collaboration product is BOW015 (infliximab), a Remicade biosimilar (JNJ -1.1%) that was recently approved in India. Livzon will be responsible for the development work necessary for approval in China and Taiwan. It will the preferred supplier of BOW015 following the transfer of Epirus' manufacturing platform and manage all commercialization activities in its territories.
- Financial terms of the deal are undisclosed.
Wed, Sep. 24, 9:38 AM
- Colgate-Palmolive (NYSE:CL) is an attractive acquisition target with its core products seeing increasing demand in developing nations, reasons Bloomberg.
- Despite the company's large size, its broad distribution network could push a buyer to stretch the wallet a bit.
- A large balance sheet and a global reach would be needed to contemplate a Colgate-Palmolive takeover. Unilever (NYSE:UL) and Johnson & Johnson (NYSE:JNJ) might fit the bill, note analysts.
Tue, Sep. 23, 5:03 PM
Mon, Sep. 22, 11:20 AM
- Under expanded access protocols approved by the FDA and Health Canada, Tekmira Pharmaceuticals (TKMR +12.7%) can now provide TKM-Ebola to patients with confirmed or suspected Ebola virus infections.
- President and CEO Dr. Mark J. Murray says, "Our TKM-Ebola drug supplies are limited, but we will continue to help where we can as we continue to focus on the other important objectives we have to advance therapies to meet the unmet needs of patients."
- Related tickers: (SRPT -5.1%)(NLNK -7.2%)(BCRX -5.1%)(NNVC -1.4%)(INO -1.8%)(OTC:FUJIF)(OTCPK:FUJIY -0.6%)(JNJ)(GSK)(HEB -7.2%)
Mon, Sep. 15, 4:36 PM
- India's Drug Controller General approves Epirus Biopharmaceuticals' (EPRS +1.7%) Remicade (infliximab) biosimilar, BOW015. It is the first infliximab biosimilar approved for sale in that country.
- The company and commercialization partner Ranbaxy Laboratories expect to launch the product by Q1 2015 under the brand name Infimab.
- Under the terms of their January 2014 license agreement, Epirus will develop and supply BOW015 and Ranbaxy will register and commercialize BOW015 in India and other territories in Southeast Asia, North Africa and selected other markets.
- Related ticker: (JNJ +0.1%)
Fri, Sep. 12, 12:30 PM
- When the FDA finally opens the door for biosimiars in the U.S. it could save as much as $250B per year by 2024 according to Express Scripts (ESRX -1.3%). There are 14 biotech meds being targeted by pharmaceutical firms who want to sell cheaper versions. Novartis (NVS -0.7%) submitted the first filing with the FDA in July for its version of Amgen's (AMGN -0.9%) Neupogen (filgrastim). Regulatory clearance could happen as early as March 2015.
- Drug companies have sought at least 76 meetings with the FDA to discuss the requirements to bring 14 different biosimilar drugs to market. Nothing will happen quickly, though. Work remains on how to name generics that are a little different from the branded versions due to different cell lines used to create them and how to design clinical studies the prove they can be safely swapped with the originals.
- The U.S. is far behind Europe. The EC began approving biosimilars in 2006. A generic version of Neupogen was cleared in 2008.
- A second biosimilar approved by the FDA may be Celltrion's version of J&J's (JNJ -0.2%) arthritis drug Remicade (infliximab). It filed its application last month.
- ETFs: DRGS
Thu, Sep. 11, 7:08 PM
- After moving back above the $100/share level, Apple (NASDAQ:AAPL) is back over the $600B mark in market cap, pushing it nearly $200B above Exxon Mobil (NYSE:XOM), the next largest company in the U.S.
- XOM is still valued at more than $400B, but Google (NASDAQ:GOOG) at $397B and Microsoft (NASDAQ:MSFT) - which has surged in 2014, adding $74B in market cap to $386B - are closing the gap.
- Berkshire Hathaway (NYSE:BRK.B) completes the top five with a $339B market cap; no other companies are worth more than $300B.
- Rounding out the top 20 market caps: JNJ, WFC, GE, WMT, CVX, PG, JPM, FB, VZ, IBM, PFE, KO, ORCL, T, MRK.
Tue, Sep. 9, 7:20 AM
- The World Health Organization says Liberia's Ebola outbreak is spreading exponentially with thousands of new cases coming. It believes that up to 20,000 people may eventually be infected and that it may take six to nine months to contain the disease.
- Fourteen of Liberia's fifteen counties have reported cases. As soon as a new treatment center opens, it is overwhelmed with patients.
- The government extends a nationwide nighttime curfew to help curb the spread of the disease.
- There is just one doctor per 100,000 citizens. 152 health care workers have been infected to date with 79 deaths.
- Sierra Leone orders a four-day countrywide "lockdown" beginning September 18 to halt the spread of Ebola within its borders.
- Related tickers: (NASDAQ:TKMR) (NASDAQ:SRPT) (NASDAQ:NLNK) (NASDAQ:BCRX) (NYSEMKT:NNVC) (NYSEMKT:INO) (OTC:FUJIF) (OTCPK:FUJIY) (NYSE:JNJ) (NYSE:GSK) (NYSEMKT:HEB)
Thu, Sep. 4, 7:02 AM
- Johnson & Johnson (NYSE:JNJ) announces that it will fast track the development of its new combination vaccine regimen against Ebola and collaborate with its partners in global health to deliver relief aid to help combat the current outbreak.
- Its vaccine candidate is a prime-boost regimen where one vector primes the immune system and the other boosts it. The product features two components based on the AdVac technology from Crucell N.V. (part of Janssen) and the MVA-BN technology from the Danish biotech firm Bavarian Nordic. The National Institute of Allergy and Infectious Diseases (NIAID) is providing direct funding and preclinical services to bring the program forward. Human clinical trials may start as soon as early 2015.
- Crucell and Bavarian Nordic are both developing preventative vaccines against filoviruses, including Ebola, with the aforementioned support from NIAID. More than 1,000 humans have received Crucell's adeno-platform-based vaccine in clinical trials. Bavarian Nordic's MVA-BN platform is the basis for the smallpox vaccine registered in Canada and Europe with a safety record of use in more than 7,300 people.
Tue, Sep. 2, 8:30 AM
- Jury selection begins for the first of some 6,000 product liability lawsuits facing Johnson & Johnson's (NYSE:JNJ) DePuy unit over its Pinnacle artificial hip. In the Dallas, TX trial, Plaintiff Kathleen Herlihy-Paoli alleges that the device's metal-on-metal design causes metal debris to leech into patients' bloodstreams causing infections that force many recipients to have them surgically removed.
- The Pinnacle product is not covered by the company's earlier $2.5B settlement of claims related to its ASR hip devices after the firm recalled 93K of the ASR implants worldwide. J&J stated publicly that the five-year failure rate was only 12%, but internal documents showed the failure to be much higher at 37%. The failure rate in Australia was 44% within seven years. The $2.5B payment settled ~8,000 lawsuits.
- Tests performed on Ms. Helihy-Paoli before she had both of her Pinnacle devices removed showed dangerously high levels of cobalt and chromium in her bloodstream. Her serum Cobalt level was 85x normal. When surgeons removed her implants they noted that the devices had turned black with metallosis.
Thu, Aug. 28, 6:08 PM
- Johnson & Johnson (NYSE:JNJ) is beginning the process of seeking a buyer for its Cordis unit that makes medical devices including stents and catheters, WSJ reports.
- Cordis reportedly could fetch $1.5B-$2B and is expected to attract interest from P-E firms and other health care companies.
- A sale would mark the latest divestiture for JNJ, which is looking to shed slower-growth businesses and reduce annual costs by $1B; JNJ said in 2011 it would leave the cardiac stent business after years of falling sales and market share.
Thu, Aug. 28, 12:11 PM
- Johnson & Johnson's (JNJ -0.3%) DePuy Synthes unit recalls certain lots of its Craniomaxillofacial Distraction System also called External Mandibular Fixator and/or Distractor and a Bone Plate. The lots are being recalled due to the risk of the device reversing direction and losing the desired distraction distance after surgery.
- Infants are at greatest risk due to the potential sudden obstruction of the trachea which could lead to respiratory arrest.
- There have been 15 reports of injury associated with use of the device.
Mon, Aug. 25, 8:23 AM
- Vivus (NASDAQ:VVUS) acquires a group of patents related to topiramate from Janssen Pharmaceuticals (NYSE:JNJ). The patents cover the use of topiramate as a monotherapy and in combination with other agents to treat a variety of medical conditions.
- Vivus agrees to pay a one-time upfront fee and royalties on Qsymia (phentermine and topiramate extended release) sales to Janssen on the basis of the assignment of patents. Janssen agrees to drop its lawsuit against Vivus.
Fri, Aug. 22, 11:21 AM
- Johnson & Johnson (JNJ -0.7%) invests $20M in the form of a convertible note in regenerative medicine company ViaCyte in exchange for a future equity stake and the rights to its type 1 diabetes combination product candidate VC-01.
- VC-01 works by loading pancreatic progenitor cells into a proprietary device that is implanted under the skin. The progenitor cells then mature into insulin-producing cells that assist the under-producing pancreas.
Thu, Aug. 21, 8:07 AM
- Ilumina (NASDAQ:ILMN) has formed collaborative partnerships with AstraZeneca (NYSE:AZN), Janssen Biotech (NYSE:JNJ) and Sanofi (NYSE:SNY) to develop a universal next-generation sequencing (NGS) system focused on oncology. The system will employ an multi-gene panel that will be used for patient selection in clinical trials of targeted cancer therapies. Illumina plans to commercialize the tests after obtaining regulatory approval.
- The emergence of panel-based assays will be a paradigm shift from today's single-analyte companion diagnostics.
- An estimated 800 oncology drugs are in development worldwide. At present, 125 cancer driver genes, 71 tumor suppressors and 54 oncogenes that drive tumor growth through 12 cellular signalling pathways have been discovered.
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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