Johnson & Johnson (JNJ)

This behemoth is priced at levels not seen in years. The market seems to have forgotten that JNJ consistently throws off monstrous cash flows, has a rock-solid balance sheet, and despite its size is expected to grow 10% annually over the next five years. Throw in a nice dividend yield of about 2.2%, and this stock should outperform the index by a reasonable margin. I think Mr. Market has momentarily missed the mark on this one, and it's time to take advantage.

Buy world-class consumer goods companies, reinvest the dividends, and then wait 30 years. Sounds boring, but that's a simplified version of Jeremy Siegel's advice for long-term wealth. JNJ is among the best of the best, and will anchor my portfolio for decades.

With 3 significantly large pharma-medical-consumer businesses, JNJ is one of the most respected and well-run businesses in the world.

The Pharma line generates 44% of its revenues and almost half the company's operating earnings. The risk/concern in the stock sits mostly with this division, but I'm confident that JNJ will improve its pipeline or work with other bio companies to grow the pharma line.

The medical devices business brings home 38% of JNJ's revenues, and is a very solid performer. They are not afraid to go after acquisitions in this field, and are even less afraid to not pay outrageous multiples (e.g. Guidant).

Which brings us to the most popular division: consumer (18% of revenues). A nice little business to balance against the other two.

With ROEs consistently near 30%, ROAs around 15% and a AAA credit rating, JNJ has it going on.

This is just a monster stock that you can always count on to performe well. The amount of research that goes on here is completely amazing. Nothing but good things to say about this stock.

Been around many years, solid management, plenty of cash to buy Biotech companies with promising drugs, sell things people actually need and use, pays a solid dividend which over time will help you build wealth

A mini health care mutual fund, paying a decent and growing dividend and with the financial strength that most envy. Management showed real character in not getting into a bidding war on Guidant. Currently out of favor a bit, due to the general threat to healthcare in the form of increased governmental regulation and depth of new product pipeline. Never forget that JNJ has the financial power to reach out and "touch" ( i.e. acquire ) almost anyone. Should ride the baby boomer aging trend quite nicely.

A dominant market leader with a recent contribution to its arsenal and a steadily increasing dividend stream. Buy now, before it reaches intrinsic value.

If strong, stable, monster-sized companies are known as "blue chips", Johnson and Johnson will need a new word to show how blue it is ("Azure Chip?" "Lavender Chip?"). This $191 billion dollar company sports a 2.2% dividend that has grown every year as far back as my research allows. The 14 cent payment in 2000 is now sitting at 33 cents. The PE sits at a not unreasonable 17 multiple. As of the end of 2005, the company sat on $16 billion in cash, with another $7 billion in receivables. From 2001 to 2005, long term debt shrank from $2.2 billion to $2.0 billion. Over the same time period, retained earnings jumped from $23 billion to $41 billion. In the last five years, outstanding shares even dropped (although not by much.) I could go on and on, but hopefully I have said enough for you to do your own DD.

I owned this stock from Feb 1995 until yesterday (3/22/07). I did okay with it and for many years just thought of it as a safe blue chip company I didn't need to worry about.

Of course I've been discouraged at its recent continuing downward trend line over the past several months. But if I still had faith in the company, I would see this as a buying oportunity. However, I've clipped too many articles about different divisions of JNJ that got into trouble because their overly aggressive sales people did not "level" with customers or patients about pharmaceutical side effects or product flaws or off-label uses. Think Reminyl, drug-coated stents, Procrit. Procrit and how it has been marketed has been a problem for a few years. Their participation in the bidding war for Guidant made me uncomfortable given the lack of accountability that company was showing over its pacemakers. When they have manufacturing plant problems, they are slow to acknowledge them. To me, their name no longer means quality. For awhile, I felt disappointed about specific incidents but that they were still overall a good company. No more. I dn't trust their corporate culture any longer. If I don't trust them, why should I think others will?

Despite the problems with their HIV drug - there are not much alternatives for use in non responders to more traditional regimens. Most of the offending incidents are concentrated in very advance HIV.

JNJ is a cash-flow machine. With operating margins expanding almost 10 percentage points over the past decade, the firm converts every dollar of sales (which have now topped the $50 billion mark annually) into almost a quarter of FCF ($10 billion).

That leaves plenty of cash to distribute back to shareholders, and the firm's annual dividend has been raised every year for more than four decades (increasing at a healthy 15% annual clip over the past five years). And with a payout ratio of just 38%, there is more room for additional hikes in the years ahead.

JNJ is a model of consistency. The firm has delivered positive top-line growth without interruption for the past 73 consecutive years, and posted double-digit earnings growth every year for the past two decades.

The company also has attractive margins, and a rock-solid balance sheet -- with a cash stockpile in excess of $14b to fund future acquisitions.

The shares are currently trading at around 17 times trailing earnings, the low water mark for the past five years (and down from a peak of 35).

This diversified global leader is well-positioned to continue delivering above-average gains for shareholders, and like most blue-chips should truly shine relative to more aggressive stocks in a down market.

A good solid company that I think very few could disagree with. They make the products that people have to have despite the state of the economy. They are good products and consumables, so folks will keep buying them over and over. The company is very well ran. They stay up on what consumers want in a changing world, and it has already been mentioned that they have good R&D. It has the potential to go higher, but I would not expect anything in the extreme. Again, my opinion is a good solid gainer over time. I actually wish I got in closer to the $60.00 range, but still a solid pick in my opinion.

It's all I can do to not put all of my money into JNJ and go nap on the couch for 25 years. Balance sheet superior. History of EPS increases superior. Industry, right where I want to be with an aging population. Trading below market multiple and paying a nice dividend. I hope it stays under $60 for a year and I'll just keep buying.

Long term, solid company. A vast stable of staples, products that consumers will want and need to buy regardless of the recession/depression. It's hard to imagine any company as being recession-proof, but I think Johnson & Johnson comes very close to that wishful ideal. During the recession of 1992-1993, it lost about 20% of its value, but other companies lost much more. During the gloomy times of mid-2001 through 2003, it traded sideways while most other large-cap companies lost money. It currently has nice profit & operating margins of 19.5% & 25.3%, RoA=12.3%, RoE=28.2%, a 6.4 quarterly revenue growth with a 29.9% quarterly earnings growth. Very nice. Hopefully, that will continue. For a large cap, it also seems to have its debt load under control, something that will separate the strong from the weak in the coming months. To wit, JNJ's Debt/Equity ratio is 32%, and has a book value of $16.45/share, which is twice better than my internal yardstick of 1/7th that of its price (currently $58.70). While we wait for the stock to appreciate, the dividend yield will help us out a bit at its current 5-year average of 2.1% (hey, it's not great, but it's there!). Finally, very few people are going against this stock, as the short interest is extremely low at only 0.80% of the float (yep, less than 1% -- nice & stable). This would be a good place to park your money for the next 2-3 years, IMO.

There's nothing like a quality brand to see a company through a challenging economic situation. Here's a solid American brand, areputation for quality, a product in every doc's office and every hospital, as well as every home medicine cabinet. Smart marketing throughout the world, a determination to maintain the brand everywhere they go -- will prove this company's staying power in commerce and on the Big Board.

Its all about the baby lotion.

Johnson and Johnson is a core-portfolio holding without a doubt.

Look at its long-term history. Talk about a perfect candidate for dollar-cost-averaging over a lengthy period of time.

It's a Dow component, it has a rich dividend history, it has a recognizable name, it is safe and full of blue (as in blue chip, of course).

Won't rocket like a parabola to the sky, but if you are young, sock some of your money away in JNJ and keep those dividends on reinvestment. Perform your own due diligence before buying (as always!).

Steady, well run pharma and consumer products company that just keeps on delivering. Consistently increases dividends. One of those companies you can buy at a discount from time to time, reinvest the dividends and hold forever. In 20-30 years, you'll be sitting on a gold mine.

What really interests me here is the consumer segment. My thinking here is much like with Target: even in an economic downturn, people are going to need band-aids, aspirin, soap, and shampoo. (The other two segments are pharmaceutical and medical devices and diagnostics.) My other reason for being interested? My mother, a savvy investor and long-time shareholder.