NYSE:JNJ

Stock Analysis Report

Executive Summary

Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide.

Rewards

Trading at 21.4% below its fair value

Earnings are forecast to grow 21.03% per year

Pays a high and reliable dividend of 2.53%

Risk Analysis

High level of non-cash earnings

Has a high level of debt



Snowflake Analysis

Established dividend payer with reasonable growth potential.


Similar Companies

Share Price & News

How has Johnson & Johnson's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: JNJ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

JNJ

-1.7%

US Pharmaceuticals

0.06%

US Market


1 Year Return

9.4%

JNJ

6.5%

US Pharmaceuticals

19.4%

US Market

Return vs Industry: JNJ exceeded the US Pharmaceuticals industry which returned 6.7% over the past year.

Return vs Market: JNJ underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

JNJIndustryMarket
7 Day-1.3%-1.7%0.06%
30 Day-0.02%-3.2%1.1%
90 Day9.3%6.8%8.9%
1 Year12.5%9.4%9.2%6.5%21.9%19.4%
3 Year35.2%24.8%27.8%18.6%48.9%39.3%
5 Year67.9%47.4%22.9%10.4%71.9%53.1%

Price Volatility Vs. Market

How volatile is Johnson & Johnson's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Johnson & Johnson undervalued compared to its fair value and its price relative to the market?

21.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: JNJ ($150.13) is trading below our estimate of fair value ($191.01)

Significantly Below Fair Value: JNJ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: JNJ is poor value based on its PE Ratio (26.7x) compared to the Pharmaceuticals industry average (21.7x).

PE vs Market: JNJ is poor value based on its PE Ratio (26.7x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: JNJ is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: JNJ is overvalued based on its PB Ratio (6.8x) compared to the US Pharmaceuticals industry average (3x).


Next Steps

Future Growth

How is Johnson & Johnson forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

21.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: JNJ's forecast earnings growth (21% per year) is above the savings rate (1.7%).

Earnings vs Market: JNJ's earnings (21% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: JNJ's revenue (4.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: JNJ's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: JNJ's Return on Equity is forecast to be high in 3 years time (26.8%)


Next Steps

Past Performance

How has Johnson & Johnson performed over the past 5 years?

-9.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: JNJ has a high level of non-cash earnings.

Growing Profit Margin: JNJ's current net profit margins (18.4%) are lower than last year (18.6%).


Past Earnings Growth Analysis

Earnings Trend: JNJ's earnings have declined by -9.1% per year over the past 5 years.

Accelerating Growth: JNJ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: JNJ had negative earnings growth (-0.2%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (2.4%).


Return on Equity

High ROE: JNJ's Return on Equity (26%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Johnson & Johnson's financial position?


Financial Position Analysis

Short Term Liabilities: JNJ's short term assets ($44.3B) exceed its short term liabilities ($35.2B).

Long Term Liabilities: JNJ's short term assets ($44.3B) do not cover its long term liabilities ($62.1B).


Debt to Equity History and Analysis

Debt Level: JNJ's debt to equity ratio (50.2%) is considered high.

Reducing Debt: JNJ's debt to equity ratio has increased from 26.9% to 50.2% over the past 5 years.

Debt Coverage: JNJ's debt is well covered by operating cash flow (79.6%).

Interest Coverage: JNJ earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: JNJ has a low level of unsold assets or inventory.

Debt Coverage by Assets: JNJ's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

What is Johnson & Johnson's current dividend yield, its reliability and sustainability?

2.55%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Johnson & Johnson before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.5%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: JNJ's dividend (2.53%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: JNJ's dividend (2.53%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: JNJ's dividends per share have been stable in the past 10 years.

Growing Dividend: JNJ's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (66.6%), JNJ's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: JNJ's dividends in 3 years are forecast to be well covered by earnings (41.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.6yrs

Average management tenure


CEO

Alex Gorsky (59yo)

7.8yrs

Tenure

US$20,097,572

Compensation

Mr. Alex Gorsky has been the Chairman and Chief Executive Officer of Johnson & Johnson since December 28, 2012 and April 26, 2012 respectively. Mr. Gorsky served as the Chief Operating Officer and Head of  ...


CEO Compensation Analysis

Compensation vs Market: Alex's total compensation ($USD20.10M) is above average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Alex's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alex Gorsky
Chairman & CEO7.8yrsUS$20.10m0.015% $58.7m
Joseph Wolk
Executive VP & CFO1.6yrsUS$2.71m0.00060% $2.4m
Paulus Stoffels
Chief Scientific Officer7.3yrsUS$10.59m0.0088% $34.8m
Michael Ullmann
Executive VP & General Counsel8.1yrsUS$5.34m0.0051% $20.1m
Joaquin Duato
Vice Chairman of Executive Committee9.1yrsUS$9.28m0.0044% $17.3m
Robert Decker
Controller & Chief Accounting Officer0.2yrsno data0.00050% $2.0m
James Swanson
Executive VP & Global CIO0.3yrsno datano data
Christopher DelOrefice
Vice President of Investor Relations1.5yrsno datano data
Michael Sneed
Executive VP of Global Corporate Affairs & Chief Communication Officer8.1yrsno data0.0020% $8.0m
Peter Fasolo
Executive VP & Chief Human Resources Officer3.8yrsUS$3.62m0.0034% $13.3m

5.6yrs

Average Tenure

56.5yo

Average Age

Experienced Management: JNJ's management team is seasoned and experienced (5.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alex Gorsky
Chairman & CEO7.8yrsUS$20.10m0.015% $58.7m
William Perez
Independent Director12.7yrsUS$339.94k0.00059% $2.3m
Ronald Williams
Independent Director8.7yrsUS$339.94k0.00014% $553.2k
Charles Prince
Independent Director14yrsUS$339.94k0.0011% $4.4m
D. Davis
Independent Director5.7yrsUS$324.94kno data
Anne Mulcahy
Lead Independent Director7.2yrsUS$354.94k0.00028% $1.1m
Ian Edward Davis
Independent Director9.6yrsUS$299.94k0.00016% $632.2k
Mark McClellan
Independent Director6.3yrsUS$299.94kno data
Mary Beckerle
Independent Director4.7yrsUS$339.94kno data
A. Washington
Independent Director7.3yrsUS$319.94kno data

7.2yrs

Average Tenure

67.5yo

Average Age

Experienced Board: JNJ's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: JNJ insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Johnson & Johnson's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Johnson & Johnson
  • Ticker: JNJ
  • Exchange: NYSE
  • Founded: 1887
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$395.123b
  • Shares outstanding: 2.63b
  • Website: https://www.jnj.com

Number of Employees


Location

  • Johnson & Johnson
  • One Johnson & Johnson Plaza
  • New Brunswick
  • New Jersey
  • 8933
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
JNJNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
JNJ *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
JNJDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
JNJSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
JNJXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
JNJBVC (Bolsa de Valores de Colombia)YesCommon StockCOCOPJan 1968
JNJSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
JNJ-UETLX (Eurotlx)YesCommon StockITEURJan 1968
JNJBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDJan 1968
JNJWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
JNJBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP O.20 ORD SHSARARSJan 2001
JNJB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1 COM SHSBRBRLAug 2012

Biography

Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer segment offers baby care products under the JOHNSON’S brand; oral care products under the LISTERINE brand; beauty products under the AVEENO, CLEAN & CLEAR, DABAO, JOHNSON’S Adult, LE PETITE MARSEILLAIS, NEUTROGENA, and OGX brands; over-the-counter medicines, including acetaminophen products under the TYLENOL brand; cold, flu, and allergy products under the SUDAFED brand; allergy products under the BENADRYL and ZYRTEC brands; ibuprofen products under the MOTRIN IB brand; and acid reflux products under the PEPCID brand. This segment also provides women’s health products, such as sanitary pads and tampons under the STAYFREE, CAREFREE, and o.b. brands; wound care products comprising adhesive bandages under the BAND-AID brand; and first aid products under the NEOSPORIN brand. The Pharmaceutical segment offers products in various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, and cardiovascular and metabolic diseases. The Medical Devices segment provides orthopedic products; general surgery, biosurgical, endomechanical, and energy products; electrophysiology products to treat cardiovascular diseases; sterilization and disinfection products to reduce surgical infection; diabetes care products; and vision care products, such as disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery. The company markets its products to general public, and retail outlets and distributors, as well as distributes directly to wholesalers, hospitals, and health care professionals for prescription use. It has research and collaboration alliance with Morphic Therapeutic. The company was incorporated in 1887 and is based in New Brunswick, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:09
End of Day Share Price2020/02/18 00:00
Earnings2019/12/29
Annual Earnings2019/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.