October 20, 2013 in Business

Johnson & Johnson adds up to consistency, quality, success

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Associated Press photo

Among the longtime staples produced by Johnson & Johnson are its baby products.
(Full-size photo)

If long-term sustainable wealth creation is your goal, look no further than Johnson & Johnson (NYSE: JNJ) as a candidate for your portfolio. It performs strongly year in and year out, regardless of the overall economy.

Johnson & Johnson features three main operating segments: medical devices and diagnostics, pharmaceutical and consumer – and controls more than 275 operating companies in all. Its medical devices and diagnostics segment is the largest medical technology business in the world, and a relatively rapid grower.

The consumer segment contains several world-class brands found in nearly every U.S. household – think Band-Aid, Listerine, Tylenol, and the company’s namesake baby care products. Its pharmaceutical business is less steady, but solid.

J&J generates approximately 70 percent of its revenue from products that hold the No. 1 or No. 2 global market positions. It has delivered 29 consecutive years of adjusted earnings increases, and earlier this year increased its dividend for the 50th year in a row. (It recently yielded 3 percent.) With a fortress-like balance sheet, J&J is one of only four nonfinancial, U.S.-based companies to hold the triple-A credit rating from Standard & Poor’s.

Add it all up, and what you’re left with is a hugely profitable, remarkably consistent company. (The Motley Fool’s newsletters have recommended it.)

Ask the Fool

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A: Created in 1971 as the National Association of Securities Dealers Automated Quotations (NASDAQ), it’s now the largest electronic stock market in America, where shares of about 3,200 companies are traded. It boasts more companies and, on average, more trades per day than any other U.S. market. Learn more at nasdaq.com.

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Still, you don’t have to blindly follow Value Line – you might just learn about companies from its reports and then make your own decisions. You seem to have done just that, with solid results.


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