Saturday, April 29, 2006

Johnson & Johnson JNJ raises dividend

"In recognition of our solid results in 2005, our very strong financial position, and our confidence in the future of the corporation, the Board has voted to increase our dividend for the 44th consecutive year," said William C. Weldon, Chairman and Chief Executive Officer of the Company.

Shares of JNJ at 58 are cheap relative to pharmaceutical sector and market as a whole. JNJ isn't flashy, but it is very profitable with an S&P earnings quality grade of A+, and consistently high 29% return on equity.

Normally when I recommend a stock, I make a detailed investment case for it. With Johnson & Johnson (JNJ) the stock almost sells itself. JNJ senior pharmaceutical company. It is largely immune from economic cycles and has deep competitive advantages over other owing to its large financial resources, scale of operations and worldwide sales force. Good stuff.

2 Comments:

At April 30, 2006 1:48 PM, Anonymous petronius said...

There is no doubt about the quality of JNJ as a long-term investment, and I would love to add some to my portfolio, but the short-term technical picture is still rather bleak. It has been in a downtrend for a full year now.

 
At April 30, 2006 7:46 PM, Anonymous market participant said...

The down trend doesn't have a fundamental basis, so I don't see it as having a predictive value in this case.

My take is that JNJ is cheap, so there is relatively limited downside at this point. I see JNJ as drifting back up to the 70s within 1-2 years.

 

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