5 reasons J&J is the perfect investment
Growth, stability, income -- what's not to like about this stock?
By Jeff Reeves
Johnson & Johnson (JNJ) fell out of favor among defensive dividend stock investors over the last year.
The company suffered from quality control issues and the stock didn't go much of anywhere from mid-2009 to mid-2012 -- even as the broader market went on a tear.
However, CEO Alex Gorsky took over two years ago and has helped lead the company back to growth. The stock has been marching steadily higher, up almost 60 percent since Gorsky took over versus 35 percent or so for the Standard & Poor's 500 Index ($INX).
That includes an impressive 9 percent gain year-to-date despite a pretty flat market.
To me, this recent strength makes Johnson & Johnson stock the rate combination of growth and rock-solid stability.
Here's why the stock is the perfect investment right now for any portfolio:
That's not burning down the house, but it's certainly encouraging given the stagnant top line at many other defensive players right now. Seven straight quarters of year-over-year revenue growth means all that much more in an environment like this.
Furthermore, compare JNJ stock with a company like Merck (MRK) or GlaxoSmithKline (GSK) and you'll see a similar forward P/E of between 15 and 16. I won't claim that after a big run you're going to make a bargain buy here, but you can have confidence that JNJ stock isn't overbought and due to crash. At worst, it's fairly valued.
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Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities.
Jeff Reeves... like MOST inherited business platforms today, they do not contain ANY enterprise and native salespeople. Feel free to invest in these junk-entities chock full of administrators, degrees and alumni, but without street-culture, they just play paper and financial wrangling games until death comes.
When the world hears that businesses with be enterprises... and not governments, conquerors, banks and conglomerate pariah... there will be investing again. What good are Board Directors all popped out of the same molds? What good are degrees without validation or warranty? What good are people in entities who are more corrupt bureaucrat than entrepreneur? It's all garbage, Jim, just like ALL of your so-called articles. Just hollow spew because somebody pays you to write dung.
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What does the country have to do with the price-to-earnings ratio of the S&P industrials? From here on in, everything.
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