Healthcare and consumer goods giant Johnson & Johnson (JNJ) made headlines when it announced it was accelerating the development of a vaccine for the deadly Ebola virus. Are these new developments helping JNJ make the grade?
Company Profile
Johnson & Johnson is not just a power player in the big pharma industry, it also began as a family company. Founded in 1886, the three Johnson brothers sought to spread the practice of and become the standard for sterile surgery in the U.S. Johnson & Johnson continues that mission today, and now, JNJ maintains this standard worldwide.
JNJ has grown to become a $71 billion company, with hundreds of products in more than 170 countries worldwide.
Industry Breakdown
From oral care, baby care and skin care products to over-the-counter medicines, JNJ has a broad consumer reach. Johnson & Johnson relies on its reputation as a trusted family company to market its products and remain a leading competitor in the global pharmaceutical industry. JNJ is first in medical devices, sixth in biologics, sixth in consumer health and sixth in pharmaceuticals.
JNJ stock also pays a 2.6% dividend, which makes it one of the highest in an industry with over 250 players.
Earnings Summary
Johnson & Johnson released a strong second quarter earnings report back in July. JNJ announced an increase in sales by 9.1% or $19.5 billion.
Looking ahead, JNJ is expected growth is 7.4% this year and 4% next quarter. Johnson & Johnson seems to be meeting analysts’ expectations. While its reports aren’t mind-blowing, JNJ is very strong in its fundamental metrics.
Current Ratings
On the fundamentals side, Johnson & Johnson gets a solid “B” rating. Johnson & Johnson’s strongest metrics are its operating margin growth (B), earnings momentum (B), earnings surprises (B), analyst revisions (B), cash flow (B) and return on equity (A).
Johnson & Johnson’s sales growth and earnings growth need some work, both receiving “Cs.” Overall, JNJ stock is a solid “B-rated buy,” and Johnson & Johnson’s growth potential looks promising.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
