Johnson & Johnson (JNJ, Financial), a leading player in the Drug Manufacturers industry, is currently trading at $166.15 with a market cap of $431.78 billion. The stock has seen a gain of 4.67% today, despite a loss of -3.34% over the past four weeks. In this article, we will delve into the company's GF Score of 87/100, a stock performance ranking system developed by GuruFocus. The GF Score is a comprehensive measure of a company's financial health, profitability, growth, value, and momentum. A higher GF Score generally indicates a higher potential for outperformance.
Financial Strength Analysis
Johnson & Johnson's Financial Strength Rank stands at 6/10. This rank measures the robustness of a company's financial situation, taking into account its debt burden, debt to revenue ratio, and Altman Z-Score. JNJ's interest coverage is 50.47, indicating a strong ability to cover its interest expenses. The company's debt to revenue ratio is 0.55, suggesting a moderate level of debt relative to its revenue. Furthermore, its Altman Z score of 3.65 indicates a low risk of bankruptcy.
Profitability Rank Analysis
The company's Profitability Rank is 9/10, reflecting its strong profitability. JNJ's Operating Margin is 25.22%, and its Piotroski F-Score is 4, indicating a stable financial situation. The company has maintained consistent profitability over the past 10 years, with a slight downtrend in the operating margin over the past 5 years (-0.30%).
Growth Rank Analysis
JNJ's Growth Rank is 8/10, reflecting its strong growth in terms of revenue and profitability. The company's 5-year revenue growth rate is 5.10%, and its 3-year revenue growth rate is 5.20%. Additionally, its 5-year EBITDA growth rate is 4.50%, indicating a steady increase in its earnings before interest, taxes, depreciation, and amortization.
GF Value Rank Analysis
The company's GF Value Rank is 6/10, suggesting that the stock is fairly valued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples and an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.
Momentum Rank Analysis
JNJ's Momentum Rank is 4/10, reflecting its moderate momentum. This rank is determined using the standardized momentum ratio and other momentum indicators. The standardized momentum ratio is the average of the performances from 12 months ago to 1 month ago and 6 months ago to 1 month ago, divided by the beta of the stock over the past 12 months.
Competitor Analysis
When compared to its main competitors, Eli Lilly and Co (LLY, Financial) with a GF Score of 79, Merck & Co Inc (MRK, Financial) with a GF Score of 88, and AbbVie Inc (ABBV, Financial) with a GF Score of 89, JNJ holds a competitive position in the market.
Conclusion
In conclusion, Johnson & Johnson's overall GF Score of 87/100 suggests a good potential for outperformance. With strong financial health, high profitability, robust growth, fair value, and moderate momentum, the company presents an attractive investment opportunity. However, investors should also consider the competitive landscape and market conditions before making investment decisions.
