Johnson & Johnson
🇺🇸 JNJ · NYSE/NASDAQ · US4781601046
Healthcare
USD 243.04 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
22.0
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: 243.04 ÷ 11.03 = 22.0
TTM period through: 2025-12-31
Forward P/E (estimated): 21.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 22.0
Yield (Fwd)
2.14%
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): 2.11%
Net Debt/EBITDA (TTM)
0.7x
Latest quarter: 4.5x
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: 2025-12-31
Latest quarter (2025-12-31): 4.5x
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)
47.1%
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): 50.5%
FCF Coverage (TTM): 1.59x
ROE
35.0%
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
14.9x
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. While the fundamental business quality is outstanding, current pricing around $243 (P/E 22.0) and a low 2.11% dividend yield offer limited upside for new capital. Existing shareholders should maintain positions given the strong fundamentals, but new investors may want to wait for a better entry point.
Sector Context
Johnson & Johnson is a global healthcare giant that researches, develops, and manufactures a wide range of pharmaceuticals and medical technologies. While healthcare provides defensive, essential services, patent cliffs and regulatory approvals introduce different dynamics compared to traditional regulated utilities, though J&J's massive scale and diversification provide utility-like stability.
📊 Strategy Analysis
- • Exceptional financial stability with Net Debt/EBITDA of just 0.71x and strong free cash flow generation.
- • Highly secure dividend backed by a conservative 41.4% trailing payout ratio and 50.5% cash flow payout.
- • Decade-long track record of consistent fundamental growth with a 5.7% dividend CAGR and highly profitable operations (35% ROE).
⚠ What to Watch
- • Valuation multiples are elevated with a trailing P/E of 22.0x, trading significantly above the preferred 8-15x target range and the estimated monopoly upper bound of $198.6.
- • Current dividend yield of 2.11% falls short of the 3% minimum threshold typically required for new income-focused positions.
- • Ongoing legal overhang from talc-related litigation continues to present headline risks and potential cash outlays.
📊 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: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.