Question

Why invest for Johnson and Johnson (JNJ) NYSE

Answer 1

This is a very subjective question. My answer below is a mix of qualitative and quantitative arguments. My suggestion will be to use this as reference and build your own answer:

Investment thesis for Johnson and Johnson (JNJ) NYSE

• Strong historical player:
  • Settled history of over a decade in the sector
  • Emergence as a leading player the sector with diversified product base and geographical spread - thus reducing dependence upon one product segment or one geography for revenues. Thus product risks and geographical risks are well diversified.
  • Despite being a mega cap company (revenue close to $ 80 bn), it's managing to grow every year
  • Glorious past
• Attractive financials
  • Strong credit rating of AA over a period of time
  • Efficient operations, good margins in the business
  • Equity research analysts predicting an incremental value creation of around 50% over five years' horizon
  • Current ratio close to 1.60x
  • Leverage - slightly over leveraged from the perspective of large cap stocks; however enough liquidity to service short term as well as long term debt. There is no concern on debt servicing part.
• Sound & experienced management team
  • Professional management
  • Empowered management
  • Sound corporate governance
  • Board of Directors comprising of professional

In line of these, Johnson and Johnson (JNJ) NYSE definitely appears to be an investment stock.