Research archive for JNJ

As far as we are concerned, the most important company related news yesterday were numbers from Johnson & Johnson. First came the announcement that the company were embarking on a 10 billion Dollar buyback program, which is around 4 percent of the shares in issue at the current share price. This is a sizeable business, not too different in market capitalisation to the two behemoths above, with a market cap of 262 billion Dollars. The business consists of three divisions, a consumer facing business with all the names that you will be familiar with and then the pharma business, with a recently larger and bolted on devices and diagnostics business.

JNJ released numbers for the second quarter yesterday, before the market opened. This is one of the oldest and most recognisable business in the healthcare space across the planet, if not the owner of that title. A bandaid is synonymous with the word plaster. It is a really big business, consisting of three specialist divisions, one being their medical devices (Synthes and DePuy), the other being the well known consumer division (if you have had a baby, you know this one well) and then lastly the pharma business.

Johnson & Johnson was established in 1886 when the Johnson brothers created a line of ready to use surgical dressings. It listed in 1944 and within that period until now, managed a run of 52 consecutive years of dividend increases. Today it operates over 275 companies around the world, 144 manufacturing plants occupying 21.7 million square feet of floor space and has a market cap of $277bn. The company is broken up into 3 business segments, namely Consumer, Pharma and Medical Devices and Diagnostics.

JNJ released their second quarter results before the market opened yesterday, here, take a look: Johnson & Johnson Reports 2014 Second-Quarter Results. Pretty significant numbers in some way, pretty insignificant in the bigger picture. First and foremost, why own a conglomerate inside of the health space, why not own separate businesses in the same space? JNJ is actually a fairly rare company as far as investments go, in my last look at the business, in May of 2014, a post titled Great diversified business, we described the business:

OK, sorry, we have been backed up here with too many off days and too many results to cover properly at the same time. We had Q1 2014 numbers from JNJ on the 24th of April, which in trading terms is so far back that you cannot remember. Q1 sales when measured against the comparable quarter were 3.5 percent better at 18.1 billion Dollars, net earnings at 4.7 billion Dollars and EPS clocked 1.64 Dollars. The dividend had a few days prior been hiked by 6.1 percent to 70 cents a quarter. That is 2.80 Dollars a year, which means that at 100 odd Dollars the yield is easy enough to work out, not so? Earnings guidance for the rest of the year is in the range of 5.80 to 5.90, which means in the middle of the range the stock trades on a forward multiple of 17.1 times, with a yield of 2.8 percent. The earnings growth for the year is expected to be somewhere in the region of 11.8 percent. Relative to their peers, the company is afforded about the same rating.

Yesterday we received 4th quarter and full year results from Johnson and Johnson. Before we delve into the numbers let's see what the share price has done. In the last year the share is up 28%, in the last 2 years it is up 54%. It has been a good performer to say the least, especially when you consider the size of the business and the risk you would be taking when buying this stock. I'd say the reward has far exceeded the risk.

You may have heard this one before, it goes something like this: What is the difference between JnJ and the US government? The answer is a very cheeky one has a triple A credit rating from S&P and the other does not. In fact the company is one of only 7 companies inside of the top 100 companies by market cap to have this distinction. There are some other amazing stats about Johnson & Johnson that I think are worth sharing. According to the annual report, the company has had only 7 CEO's in their 127 years, so I guess the job is rewarding and challenging enough for the chief to stick around long enough. Alex Gorsky is currently the 9th chairman (he is also the CEO). The business has been listed since 1944, I am pretty sure that when they hit the screens tape, times were pretty uncertain!

Yesterday evening we received results from our favoured healthcare stock in New York, Johnson and Johnson. It was a healthy beat but let's look at that later, I want to first look at what the share price has done over the last year. In this low interest environment stocks like JNJ with high dividend yields have naturally done very well. So far the stock is up 29% this year. Of course that is not only because it has a strong dividend, the company has shown good growth. The company was flat for the second half of last year so the stock is only up 32% in a full year. You see patience does pay.

Yesterday we saw results from our favoured healthcare stock in our US portfolios, Johnson & Johnson. What a history this company has. It was founded in 1886 and has been listed since 1944. It has boasted 29 consecutive years of adjusted earnings increases and 50 years of consecutive dividend increases. It now has a market cap of $227bn and boasts annual sales of $67bn.

Yesterday we received quarterly and full year results from one of our staple holdings in New York, often called the bluest of blue chips, Johnson and Johnson. I have written about these guys on numerous occasions but as a reminder and because these numbers shift each quarter, below is the earnings mix of the company. This is for the full year 2012.

They call it the bluest of blue chips. Johnson and Johnson, the $195bn producer of medical devices and diagnostics, pharmaceuticals and consumer health products released third quarter numbers on Tuesday. The company has been busy this year with an acquisition of medical device maker Synthes and a lot of research and development spend hence third quarter profits dropping 7.3% from this time last year.

Johnson & Johnson, one of the best known consumer brands globally, reported second quarter numbers before the market opened on Wall Street yesterday afternoon. Jozi time afternoon of course, I guess we are luckier that US markets are open whilst we are awake and not in the wee hours of the morning. Hmm... another reason not to live too far East of this time zone. JNJ reported revenue of 16.5 billion Dollars, which was actually lower than the comparable Q2 in 2011, mostly as a result of a negative currency translation, which had as much as a 7.5 percent impact. Excluding special items, EPS clocked 1.30 USD, slightly better than expected. The guidance for the full year however was lower than prior guidance with the range now expected to be between 5.00 to 5.07 USD for the current financial year. Prior guidance was 7 cents higher than the top end of the range given. The dividend was actually declared a day prior, 61 cents for the year. So, based on that guidance and 244 cents worth of dividends a year, the stock trades on a forward earnings multiple 13.8 times and a dividend yield of 3.8 percent. That is a huge attraction, that yield is really awesome when compared to that of US treasuries. Oh, and if you need reminding, the stock was higher than it is now in 2008, where it was a little above 71.50 Dollars. That looks like the all time high.

Yesterday we had loads of exciting companies releasing their quarterly earnings. One of those was Johnson & Johnson who reported adjusted earnings which beat forecasts. I say adjusted because they had big legal settlements and product liability costs. Unfortunately that is one of the risks when investing in a big pharmaceutical business.

Johnson & Johnson results, these were quite tricky to look at, remember that there are three distinct parts to this business, the consumer division, which is the lowest margin of all their businesses. But has all the well known brands. But so does the MDD division (Medical devices and diagnostics) and perhaps even more so, Prescription products, where all the high margin stuff comes from. And amazingly some old eerr.... drugs, are still huge sellers.

Johnson & Johnson results yesterday morning, prior to the market opening. A miss by the analyst community, yes, I am going to say that. Not by much, but top line beat expectations which was also pleasing. The company in many ways shares the same sort of characteristics that would attract you to say for instance the aforementioned Coca-Cola. Steady, giant, good brands, solid history, nothing flashy, just a good old product that you know. Innovating in their own way.