This company (NYSE-JNJ) has reported on some things for the financial year ending in 2010, but I cannot find a complete set of financial statements at their site. I have picked up figures from a few other sites that I believe to be reliable. I follow a couple of US companies although I am not invested in US stocks. We are always told we should invest outside our market, so I want to see how I would have done if I had invested in some the big, recommended US dividend paying stock.
Would I have made any money over the past 5 or 10 years in this stock? The very short answer is no. The total return over the past 5 and 10 years for a Canadian would be .5% per year and -.3% per year, respectively. I also looked at the 5 year periods that end over the last 9 years, and the story does not get hopeful. It is only the 5 year period ending in December 2002 that there is any sort of good return and that is a total return of 14.5% per year.
The next best year is the 5 year period ending in December 2008 and that period had a return of 4.7% per year. The next best year is the 5 year period ending in December 2004 and that period had a return of 3.8% per year. All the other years were negative or close to 0%. I cannot image that this company would have been a good investment for a Canadian since 2008.
It would also seem that American investors did not do a lot better. I get their 5 and 10 year total return at 4% per year and 3.5% per year respectively. On this spreadsheet, I only calculate return (capital gain), total return (capital gain and dividends) and dividend growth in CDN$. When it comes to dividend growth, although the Americans have done better, we have also done quite well. The 5 and 10 year growth in dividends in US$ is 10.6% per year and 13% per year respectively. The 5 and 10 year growth in dividends in CDN$ is 7.3% per year and 8.3% per year respectively.
In US$ terms, the growth figures for this company are good, expect for growth in Revenue. The 5 and 10 year growth in revenue is 4% and 7.8% per year, respectively. The growth in revenue per share comes in slightly better at 6.7% and 8% per year, respectively. The growth in cash flow is around 9% per year and this is good. The growth in book value is at the rate of around 11% per year and this is also good.
All the debt ratios on this stock are quite good. The Liquidity Ratio is currently 2.05 and has a 5 year average of 1.73. The Asset/Liability Ratio is currently at 2.22 with a 5 year average of 2.29. For these ratios, anything above 1.50 is good. The Leverage Ratio is 1.82 with a 10 year average of 1.77 and the Debt/Equity Ratio is at 0.82 with a 10 year average of 0.77. With these two last ratios, lower is better. Also, they are ratios that you want to compare to other companies in the same industry rather across industries.
The last thing to talk about is the Return on Equity. The ROE at the end of December 2010 is 23.6% and the 5 year average is 25.9%. These both are very good.
Tomorrow, I will look at what the analysts say and what my spreadsheet says on this stock.
Johnson & Johnson is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. The company's worldwide business is divided into three segments: Consumer; Pharmaceutical; and Professional. Its web site is here JNJ. See my spreadsheet at jnj.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
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