Johnson & Johnson
🇺🇸 JNJ · NYSE/NASDAQ · US4781601046
Healthcare
USD 226.71 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
26.2
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 226.71 ÷ 8.65 = 26.2
TTM period through: 2026-03-31
Forward P/E (estimated): 19.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 26.7
Yield (Fwd)
2.36%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.26%
Div. Growth (5Y CAGR)
5.4%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
-0.1x
Latest quarter: -0.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): -0.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 46.2%
Cash Flow Payout (TTM): 54.8%
FCF Coverage (TTM): 1.42x
ROE
26.4%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
16.8x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Johnson & Johnson is a premier global healthcare leader with exceptional financial stability, a fortress balance sheet, and a long history of safe, growing dividends. Existing shareholders should maintain positions given the outstanding business quality and defensive characteristics, but new investors may find current valuation multiples (P/E 26.2) and the 2.26% yield unappealing for fresh capital.
Sector Context
Johnson & Johnson is a premier global healthcare conglomerate that develops, manufactures, and sells pharmaceuticals and medical devices. In the context of dividend investing, large-cap healthcare companies like JNJ provide highly defensive, recession-resistant cash flows, though ongoing legal and regulatory scrutiny are standard sector risks.
📊 Strategy Analysis
- • Fortress balance sheet demonstrated by a remarkably low Debt/Equity ratio of 0.22 and a negative Net Debt/EBITDA of -0.13.
- • Exceptional dividend track record with decades of consecutive increases, supported by a highly sustainable trailing payout ratio of 48.84%.
- • Strong free cash flow dividend coverage of 1.42x ensures the dividend remains secure even during broader economic downturns.
- • Outstanding business fundamentals with stable net margins averaging near 27% and consistent 10-year revenue growth.
⚠ What to Watch
- • Valuation is significantly stretched with a trailing P/E of 26.21, well above the strategy's target range of 8-15x.
- • The trailing dividend yield of 2.26% falls short of the minimum 3% threshold typically required for new income-focused positions.
- • Persistent headline risk and ongoing legal expenses related to continuous talc and product liability litigation cases.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.