Johnson & Johnson
Johnson & Johnson Fundamental Analysis
Johnson & Johnson (JNJ) shows strong financial fundamentals with a PE ratio of 26.51, profit margin of 21.83%, and ROE of 26.26%. The company generates $95.0B in annual revenue with moderate year-over-year growth of 6.05%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 74.9/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze JNJ's fundamental strength across five key dimensions:
Efficiency Score
ExcellentJNJ demonstrates superior asset utilization.
Valuation Score
ModerateJNJ shows balanced valuation metrics.
Growth Score
ExcellentJNJ delivers strong and consistent growth momentum.
Financial Health Score
ExcellentJNJ maintains a strong and stable balance sheet.
Profitability Score
ExcellentJNJ achieves industry-leading margins.
Key Financial Metrics
Is JNJ Expensive or Cheap?
P/E Ratio
JNJ trades at 26.51 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, JNJ's PEG of -6.01 indicates potential undervaluation.
Price to Book
The market values Johnson & Johnson at 6.87 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 17.52 times EBITDA. This signals the market has high growth expectations.
How Well Does JNJ Make Money?
Net Profit Margin
For every $100 in sales, Johnson & Johnson keeps $21.83 as profit after all expenses.
Operating Margin
Core operations generate 26.87 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $26.26 in profit for every $100 of shareholder equity.
ROA
Johnson & Johnson generates $10.47 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Johnson & Johnson produces operating cash flow of $22.54B, showing steady but balanced cash generation.
Free Cash Flow
Johnson & Johnson generates strong free cash flow of $17.54B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.28 in free cash annually.
FCF Yield
JNJ converts 3.24% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
26.51
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-6.01
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.87
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.70
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.22
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.26
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How JNJ Stacks Against Its Sector Peers
| Metric | JNJ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 26.51 | 28.81 | Neutral |
| ROE | 26.26% | 643.00% | Weak |
| Net Margin | 21.83% | -44312.00% (disorted) | Strong |
| Debt/Equity | 0.22 | 0.36 | Strong (Low Leverage) |
| Current Ratio | 1.03 | 4.50 | Neutral |
| ROA | 10.47% | -17799.00% (disorted) | Strong |
JNJ outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Johnson & Johnson's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
23.63%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
97.46%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
12.97%
Industry Style: Defensive, Growth, Innovation
High Growth