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Johnson & Johnson adds up to consistency, quality, success

Sun., Oct. 20, 2013

Among the longtime staples produced by Johnson & Johnson are its baby products. (Associated Press)
Among the longtime staples produced by Johnson & Johnson are its baby products. (Associated Press)

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.)

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