* Note: Prices are in Million (M) USD.
Description:
Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company is ranked No. 36 on the 2021 Fortune 500 list of the largest United States corporations by total revenue. Johnson & Johnson is one of the world's most valuable companies, and is one of only two U.S.-based companies that has a prime credit rating of AAA, higher than that of the United States government.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $24,105 M
Debt : $36,634 M
EBITDA : $30,254 M
Net Debt (Debt - Cash): $12,529 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Healthcare
Industry: Drug manufacturers - major
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 15.51
Since Forward PE Ratio is between 15 - 20, 3 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $15,403 M
Average Revenue: $71,370 M
Revenue Converted To Free Cash Flow (%): 21.6%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $88,821 M
Revenue 4 Years Ago (2020-12-31): $82,584 M
Last 5 Years Average Revenue Growth: 2%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $2,407 M
Share Count 5 Years Ago (2020-12-31): $2,671 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $11.68
Trailing 12-Month Earnings Per Share (EPS): $10.94
Average Earnings Per Share (EPS): $11.31
Dividend Per Share (DPS): $5
Payout Ratio: 44%
Dividend Yield: 3%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 3, 3 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 23.9%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $175
52-Week Low: $138
Threshold Price (15% Above 52-Week Low): $159
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $402,988 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 29 points to above Johnson & Johnson (JNJ) stock.
Last 20 Years Avg PE 16.07, Fair Value PE 15, Industry Based PE 15, Growth Based PE 1, RCFC Based PE 27.27, ROE Based PE 29.08, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 17.21. Value-Trades has assined P/E value 17.21. Since an average (Current Year EPS + Next Year EPS) earning per share is $11.31.
The fair value of Johnson & Johnson (JNJ) stock should be (17.21 x $11.31) = $194.7.
