Is $JNJ Getting to Buy Territory?

Is $JNJ Getting to Buy Territory?
By Kityvankova (Own work) [Public domain], via Wikimedia Commons

Is $JNJ Getting to Buy Territory?

I find it interesting that BV/Share and the dividend have grown at the same rate for the past decade

“Davidson” submits:

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Johnson & Johnson (NYSE:JNJ) was over-priced in 2002, but today it finally looks worthwhile. Market psychology took ~10yrs to washout to get to this level as one can see from the Pr/BV trend in the chart.

Here is my analysis on JNJ. You have 2 return streams, 1) %Div and 2) Gwth Rate of BV/Shr. For JNJ the BV/Shr Gwth has been 11% since 2002, but what you receive depends on the Pr/BV ratio at which you buy it.

In 2002 JNJ was priced at 7x BV and the 11% BV Grwth Rate becomes 1.57% while the DIV was 1.54% for a total return of just over 3%. The stock did has not had great performance since 2002 as the Pr/BV dropped to the recent just below 3x BV even though the growth was quite steady.

At 3x BV you get 3.67% BV Growth and today you get 3.6% DIV for a total 7.25%+. This is good today in a 4.9% Prevailing Rate climate. JNJ has grown its dividends at the same pace as its BV/Shr the past 10yrs.

I would buy JNJ in today’s market.

Capture590 624x392 Is JNJ Getting To A By Point?

 By: valueplays

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

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