AAA rated Johnson & Johnson (JNJ) has produced one of the most impeccable and consistent long-term records of fundamental results and growth. No matter whether you are measuring earnings, cash flows or dividends, you will be hard-pressed to find any company in any industry with a more consistent and complete record of operating excellence than Johnson & Johnson.
Consequently, in the minds of many investors, Johnson & Johnson is considered a forever stock. Personally, I can’t disagree. However, even with forever stocks there are good and bad times to initiate an investment. For much of 2016 and most of 2017, Johnson & Johnson was a little pricey. However, in 2018 Johnson & Johnson’s stock price has been steadily moving towards alignment with intrinsic value. Although I still don’t consider it a screaming bargain, I do consider it a reasonable choice given its quality and above-market dividend yield.
Johnson & Johnson: FAST Graphs Analyze out Loud Video
I never invest in a stock simply hoping that it might go up. Instead, I always endeavor to calculate reasonable but specific future return expectations. Therefore, in the following FAST Graphs Analyze out Loud Video, I will illustrate and calculate reasonable total return calculations and expectations on Johnson & Johnson through calendar year-end fiscal year 2021. Although forecasting future returns will never be perfectly precise, I believe it’s imperative that investors have a rational sense and forecast of what a given investment in a specific company might be capable of generating. Stated simply, investors would be wise to run the numbers out to their logical conclusion. In my mind, this represents a significant differentiation between investing versus speculating.
Disclosure: Long JNJ at the time of writing.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.