Latest March numbers are out. Johnson Chemicals, a Taiwanese subsidiary of Johnson and Johnson, has posted over a 35% sales growth in the month of March on a year on year basis.
After the outbreak of the pandemic crisis in the economy though nobody is sure that whether this Covid-19 transmission has moved into the rearview mirror or not but there is ray of hope outgoing in the economy to revive from this contagion outbreak. Now when it comes to the investors, they look for the stock which could be resilient even when fear of Covid-19 is most frenetic.
Now when it comes to the frenzied stock the old school name Johnson and Johnson (NYSE:JNJ) could be the most defensive move towards progress. Not only being the company which provided healthcare products which most of us are aware of but this company is responsible for providing pharmaceutical products which are eminent like Remicade and Stelara, Imbruvica for oncology treatment, Xarelto to fight blood clot if we need to name a few.
The most attractive fact for the investors is that Johnson and Johnson has experienced increase of 8.7% in their Pharmaceutical Segment sales which was near about $11.1 billion. And if analyzed internationally then there was an increase of 8.8% in the pharmaceutical sales which duly include operational growth of 12%.
There was a positive 1% impact of Covid-19 on the pharmaceutical segment operational sales growth of the company which was further driven by increased prescriptions being filled so as to ensure that access to essential medicines could be there.
The revenue of $42.2 billion from prescription pharmaceutical is made up more than half of company business if compared to last year. This Reflection of a prescription pipeline and drug portfolio is not expected by many investors from this old school name.
(Source: Business Quant)
Not only this but this 134 year old company is dedicated towards making available the Covid 19 vaccine at affordable price as quickly as possible
This is the company bestowed by S&P with AAA credit rating making it one of the defensive play. The stock of this company is considered to be the healthiest stock with regard to long term investments even though there is slow and steady progress.
One of the fact that makes Johnson & Johnson stock a defensive play is that illness is not affected by the economy contraction as we don’t get to choose when we can be sick or sickness which we can create. Thus consistent cash flow could be expected as pharmaceuticals would be required further as well.
The segments of this company involve consumer health products, medical devices and pharmaceuticals which at anyhow will be a requirement of all time.
Even if the past recession conditions are considered for over 100 years then it could be observe that this company has managed well during global recessions. A continuous growth in dividends be observed wherein 2.61% dividend yield was offered by the company with a payout ratio of 52.29%.
Worldwide sales in Q1 grew to $20.7 billion and P/E ratio recorded by the company is 23.04 which shows the company stock valuation and its earnings.
Considered as defensive stock this company is one of the priority long term investment for people who look for retirement stocks and want to play safe in the market.
The safe and steady growth of the company act as a shield for it when it comes to long term investment.The revenue growth of the company was 77% in month of February whereas in month of March it was 30.7%.This shows that even though the pandemic crisis was going on in the economy a considerable growth could be observed.
The net earnings of the company was $5796 million in the current quarter whereas at the same time company recorded $3749 million net earnings last year. And thereby almost 54% changed could be observed if compared to last year.
Also company recorded $6509 mn EBT which is approximately 31.5% of the sales made by the company. Also there was an increase in the dividend given to the shareholders this year in comparison to last year.
Thus this shows that even during this coronavirus contagion the company is working well and as recorded in the past years as well the company is continuously offering increased dividend to its shareholders. Thus this makes the company stock defensive and healthy to play.
Thus we can conclude that the stocks of Johnson and Johnson is slow and steady but still it is a defensive play for those who want to gather less risk and preferring long term investments. The investors can also gain in this pandemic crisis as the company is not only having increased revenue as per the latest quarter but with time as it will soon be making available the vaccine at affordable prices for the outbreak it could be said that with time the revenue of company will tend to increase.
Thus investing in JNJ is a defensive play for the investors especially in long term as the necessity for pharmaceuticals and medical devices could not be eliminated.