J&J Q4 - Boring Does The Job

Johnson & Johnson is probably our most boring recommended stock. The company itself has many exciting products, but the share price just plods along, paying out a decent dividend. Due to this stability, J&J was one of our only holdings last year to post positive returns. The reason for their predictable earnings is that they have three major divisions that dovetail nicely with each other. Each quarter, at least one of the parts does well.

In the quarter to end December, the pharmaceutical and medical devices divisions saw a slight decline in sales, but the consumer retail division grew strongly. Sales of J&J's Covid-19 vaccine fell precipitously, by 57% to $689 million. No-one wants to take that shot anymore, which is understandable.

The group still plans to spin out the consumer products division into a new listed company which will be called Kenvue. We will be left with the more profitable pharmaceutical and medical devices divisions. The company forecasts strong growth in drug sales over the next two years, thanks to a promising pipeline of treatments. Specific mention was made of Spravato, a nasal spray for treating resistant depression, and Tremfya, which is rapidly growing as a treatment for psoriasis and psoriatic arthritis.

Steady as we go. J&J is an anchor in your portfolio.