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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%.
Johnson & Johnson DGI Trumps Pure Income Vanguard Wellington
- Can Dividend Growth Investing be Total Return Investing and vice versa? Yes.
- Can Dividend Growth Investing be Pure Income Investing and vice versa? Yes.
- How might a Pure Income investment initiated in 1994 compare to an investment in JNJ for a similar period, if JNJ shares were necessarily sold to meet similar income requirements?
- The emotion can be taken out of the argument, with comparative actual data, and simple spreadsheet calculations providing a logical conclusion.
Don't Dump Your Johnson & Johnson Shares For VHT Just Quite Yet
- A recent article recommended selling Johnson & Johnson stock in favor of Vanguard Health Care ETF, based largely on valuation and diversification.
- Does the VHT ETF truly offer investors more than JNJ? Or can JNJ serve a different purpose in investors' portfolios?
- How does the valuation method described by the author - fair P/E equals dividend yield plus expected earnings growth - compare to Street estimates for certain healthcare stocks?
Thu, Nov. 13, 5:55 PM
- Geron (NASDAQ:GERN) +30.7% AH on news it entered into an exclusive worldwide license and collaboration agreement to develop its blood disorder drug imetelstat with Johnson & Johnson (NYSE:JNJ) unit Janssen Biotech.
- GERN says it will receive $35M upfront and could receive as much as $900M more as the drug is tested and if it is approved by regulators and reaches certain sales targets; it also would get royalties on sales of imetelstat.
- The companies plan to start a mid-stage trial of imetelstat in 2015; they also want to study the drug as a treatment for other blood diseases.
Mon, Feb. 10, 7:56 AM
- Addex Therapeutics' (ADDXF) ADX71149 treatment for anxious depression was not more effective than a placebo in a Phase IIa trial.
- The results don't "support the further development of ADX71149 in anxious depression," Addex says, although the exploration of the drug for other purposes "remains of potential interest."
- Johnson & Johnson (JNJ) unit Janssen conducted the trial.
- The failure is a major blow, as anxious depression is a leading cause of disability worldwide.
- Addex shares are -27% in Zurich. (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.
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.
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.
Nov. 14, 2013, 11:33 AM
- Wedbush's Gregory Wade, an bull from way back, strikes a slightly more cautious tone on Pharmacyclics (PCYC +1.4%), removing the shares from the Best Ideas list a day after ibrutinib won FDA approval in MCL.
- "While subsequent compendium listings ... in RR CLL/SLL may lead to a change to this policy, we expect the absence of support of about $8900/patient contribution under Medicare Part D payment to be a significant barrier to the near-term use of the drug in the larger off-label settings," Wade says, adding that "there's a good amount of off-label expectations baked into some of the Street's expectations."
- Outperform rating is maintained. Price target is $165.
- Concerns about the drug's cost seem warranted. At $90+ per pill, Imbruvica will cost around $130K/year. Here's TheStreet's Adam Feuerstein outlining some mitigating factors: "PCYC is setting up a program to offer two months of free drug to patients who encounter reimbursement problems and co-payment assistance plans for patients who cannot afford the drug."
Nov. 1, 2013, 12:55 PM
- Deutsche's Alethia Young thinks the rally in shares of Idenix Pharmaceuticals (IDIX +41%) may be attributable to the upcoming AASLD meeting which begins this weekend.
- Here's Young: "IDIX has noted that they are not interested in an exclusive arrangement with JNJ or anyone else [but] we would assume that any HCV developer would be interested in a nuke."
- IDIX's HELIX-1 trial is evaluating the company's NS5A inhibitor, samatasvirin in combination with JNJ's simeprevir.
- Deutsche has the shares at Hold.
Oct. 28, 2013, 10:09 AM| Comment!
Oct. 15, 2013, 8:04 AM
- Shares of Johnson & Johnson (JNJ) are up 1.8% premarket following the company's top and bottom line Q3 beat.
- Domestic sales rise 1.7% for the quarter, while international sales jump 4.2%.
- Diluted EPS +8.8% Y/Y.
- Global consumer sales come in at $3.6B, up 2% Y/Y ex-currency impact.
- Global pharmaceutical sales rise 10.9% (ex-currency impact) to $7B.
- Worldwide medical devices sales of $6.9B rise slightly, but fall when adjusted for a negative currency impact of 2.3%.
- FY13 EPS guidance raised to $5.44-5.49 from $5.40-5.47. Consensus is $5.46. (PR)
Oct. 8, 2013, 3:04 PM
- Johnson & Johnson's (JNJ -0.7%) purchase of GlaxoSmithKline's (GSK -1%) hepatitis C treatment sends Idenix Pharmaceuticals (IDIX -15.8%) tumbling. JNJ bought the rights to a compound in a class of drugs called non-structural 5A protein inhibitors, suggesting it's close to ending its partnership with Identix based on its hep C therapies, including the NS5A drug samatasvir, says Wells' Brian Abrahams.
- "Hep C battle lines (are) being drawn,” says Abrahams. Idenix’s drug “will need a new partner.”
Sep. 26, 2013, 11:47 AM
- All aboard the Pharmacyclics (PCYC +8.6%) bandwagon. JPMorgan's Cory Kasimov is out with new coverage at Overweight.
- The stock "certainly isn't cheap," Kasimov notes (it's up more than 100% so far this year), but that doesn't stop him from predicting that it's about to get even less cheap: Price target is $142.
- The rationale: It's all about Ibrutinib (developed with JNJ) which William Blair says may just be the "largest product in hematology oncology history."
- "Investor appetite will persist based on the drug's multibillion-dollar sales potential," Kasimov says, adding that "on the regulatory front, ibrutinib is largely de-risked given its highly promising safety/efficacy profile and multiple Breakthrough Therapy designations." JPM expects approval this year.
- More on Ibrutinib and Breakthrough Therapy here
Jul. 29, 2013, 9:44 AM
- Leerink upgrades Actavis (ACT +1.8%) to Outperform from Market Perform, dismissing "current overhangs" as "low grade earnings risks."
- Price target raised to $155 from $133
- ACT files ANDA for a generic version of Janssen's (JNJ +0.3%) Nucynta. Janssen and Grunenthal GMBH file suit to prevent commercialization.
- Recent ACT news: Q2 earnings summary.
Jul. 19, 2013, 1:01 PM
Jun. 28, 2013, 12:25 PMJohnson & Johnson's (JNJ -0.8%) Janssen Research & Development unit says the FDA has rejected the approval of its blood thinner Xarelto as oral anticoagulant used to reduce the risk of stent thrombosis in patients with acute coronary syndrome. Since aprroving the drug in July 2011, the agency has expanded its use for treating certain blood clots and reducing their recurrence, and is currently approved for six clinical uses in the United States. Xarelto is co-marketed by JNJ and Bayer (BAYRY.PK) | Comment!
Jun. 24, 2013, 3:12 PMJohnson & Johnson's (JNJ +2.5%) subsidiary Cordis says European regulators and the FDA have approved additional sizes for the company's Sleek OTW platform, an ultra-low profile percutaneous transluminal angioplasty dilatation catheter. The device is a highly deliverable balloon catheter designed to treat patients undergoing peripheral angioplasty procedures below the knee. | Comment!
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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