Time to Tap Healthcare ETFs on Nvidia's AI Ambition?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 04 2024
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Should l Buy JNJ?
Source: NASDAQ.COM
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Analyst Views on JNJ
Wall Street analysts forecast JNJ stock price to fall
20 Analyst Rating
13 Buy
7 Hold
0 Sell
Moderate Buy
Current: 224.620
Low
190.00
Averages
218.50
High
240.00
Current: 224.620
Low
190.00
Averages
218.50
High
240.00
About JNJ
Johnson & Johnson and its subsidiaries are engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The Company’s segments include Innovative Medicine and MedTech. The Innovative Medicine segment is focused on various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, cardiovascular and metabolism. Its products include REMICADE (infliximab), SIMPONI (golimumab), SIMPONI ARIA (golimumab), STELARA (ustekinumab), TREMFYA (guselkumab), EDURANT (rilpivirine), and INVEGA SUSTENNA/XEPLION (paliperidone palmitate). The MedTech segment includes a portfolio of products used in cardiovascular, orthopedics, surgery, and vision categories. The Cardiovascular portfolio includes electrophysiology products to treat heart rhythm disorders and circulatory restoration products (Shockwave) for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Dividend Stocks Comparison: Johnson & Johnson vs. AbbVie
- Diversification Advantage: Johnson & Johnson's diversified operations in pharmaceuticals and medical devices allow it to maintain stability in a competitive market, with revenue growth despite losing Stelara's patent, and it is projected to reach $100 billion in revenue by 2026, becoming only the second biopharma to achieve this milestone in history.
- Core Growth Drivers for AbbVie: AbbVie's leadership in immunology led to $15 billion in revenue in Q1, a 12.4% year-over-year increase, with Skyrizi and Rinvoq contributing $6.6 billion, showcasing strong market performance, though it faces competitive risks.
- Dividend Growth History: Johnson & Johnson has raised its dividends for 64 consecutive years compared to AbbVie's 54 years, indicating stronger financial stability and long-term investment appeal, particularly in the current market environment, with its AAA credit rating further enhancing its attractiveness as a low-risk investment.
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See More
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- Cash Flow to Dividend Ratio: Last year, Johnson & Johnson reported $20.4 billion in free cash flow against $12.4 billion in dividends, resulting in a strong 61% ratio that indicates robust dividend-paying capacity and reflects the company's financial health.
- Market Performance and Yield: With a dividend yield of 2.31% and an average of 2.7% over the past decade, significantly above the market average, Johnson & Johnson enhances its appeal as an investment choice for income-focused investors.
- Strong Financial Resources: As of the end of Q1, Johnson & Johnson held $21.7 billion in cash and cash equivalents, ensuring its ability to maintain dividend payments, which further solidifies investor confidence in its dividend safety.
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- Johnson & Johnson Increase: The Trust purchased 65 shares of Johnson & Johnson at around $223, increasing its total to 290 shares and raising its portfolio weight from 1.3% to 1.7%, reflecting confidence in the long-term growth potential of the healthcare sector despite current market disfavor.
- Healthcare Sector Confidence: Despite the underperformance of healthcare stocks, Cramer remains optimistic about Johnson & Johnson and other healthcare positions, noting that all three companies exceeded earnings expectations and raised their full-year outlooks, indicating strong fundamentals.
- Robotic Surgery System Milestone: Johnson & Johnson's Ottava robotic surgery system achieved a critical milestone in its first clinical study, paving the way for FDA approval, which supports the company's goal of double-digit revenue growth by the end of the decade.
See More
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- Market Performance: On Tuesday, markets continued to rise without new escalations in the Middle East conflict, with West Texas Intermediate crude down about 4% and the benchmark 10-year Treasury yield slightly lower, indicating increased investor confidence in the market.
- Tech Stocks Lead: Chipmakers like Intel, SanDisk, and Micron saw double-digit percentage gains, driving a strong overall performance for technology stocks, with Amazon, Broadcom, Alphabet, and Qnity hitting new 52-week highs, reflecting robust performance in AI-related stocks.
- Strong Earnings Boost Materials: The materials sector emerged as the top performer in the S&P 500, with DuPont being the biggest mover due to its strong earnings report, highlighting investor confidence and interest in the materials industry.
- Robotic Surgery System Progress: Johnson & Johnson announced that its Ottava robotic surgery system achieved primary endpoints in clinical studies for Roux-en-Y gastric bypass procedures, which is expected to support FDA approval for multiple upper abdominal surgeries, further solidifying its position in the robotic surgery market.
See More
Market Dynamics: Oil Prices and Tech Stocks Fluctuate
- Oil Price Recovery: West Texas Intermediate crude oil prices rebounded above $97 per barrel after a morning dip, reflecting cautious optimism about future demand, which could impact related energy stocks' performance.
- Divergent Tech Stock Performance: As AI-related stocks pull back, cybersecurity software stocks like CrowdStrike and Palo Alto Networks surged, crossing $500 and $190 respectively for the first time, indicating increased market confidence in their business models and potentially attracting more investor interest.
- Boeing Stock Rise: Boeing's shares rose as CEO Kelly Ortberg is set to accompany President Trump on his trip to China, with the market anticipating a major order of up to 500 planes, although skepticism remains regarding the order's realization.
- Employment Data Expectations: Economists forecast a 65,000 increase in April's nonfarm payrolls with the unemployment rate steady at 4.3%, while average hourly earnings are expected to rise by 3.8%, providing crucial economic health indicators that could influence investor confidence.
See More
Dividend Stocks Comparison: Johnson & Johnson vs. AbbVie
- Diversification Advantage: Johnson & Johnson's diversified operations in pharmaceuticals and medical devices allow it to maintain stability in a competitive market, with revenue growth despite losing Stelara's patent, and it is projected to reach $100 billion in revenue by 2026, becoming only the second biopharma to achieve this milestone in history.
- Core Growth Drivers for AbbVie: AbbVie's leadership in immunology led to $15 billion in revenue in Q1, a 12.4% year-over-year increase, with Skyrizi and Rinvoq contributing $6.6 billion, showcasing strong market performance, though it faces competitive risks.
- Dividend Growth History: Johnson & Johnson has raised its dividends for 64 consecutive years compared to AbbVie's 54 years, indicating stronger financial stability and long-term investment appeal, particularly in the current market environment, with its AAA credit rating further enhancing its attractiveness as a low-risk investment.
- Market Risks and Opportunities: While Johnson & Johnson faces litigation risks related to its talc products, its diversified portfolio enables it to navigate challenges like drug pricing negotiations, whereas AbbVie shows potential in new product launches, especially with its weight-loss treatment performing well in clinical trials.
See More
Johnson & Johnson: A Strong Dividend Safety Analysis
- Dividend Growth Stability: Johnson & Johnson has increased its dividend for 64 consecutive years, establishing itself as a Dividend King, which demonstrates exceptional stability in dividend payments and attracts long-term investors.
- Cash Flow to Dividend Ratio: Last year, Johnson & Johnson reported $20.4 billion in free cash flow against $12.4 billion in dividends, resulting in a strong 61% ratio that indicates robust dividend-paying capacity and reflects the company's financial health.
- Market Performance and Yield: With a dividend yield of 2.31% and an average of 2.7% over the past decade, significantly above the market average, Johnson & Johnson enhances its appeal as an investment choice for income-focused investors.
- Strong Financial Resources: As of the end of Q1, Johnson & Johnson held $21.7 billion in cash and cash equivalents, ensuring its ability to maintain dividend payments, which further solidifies investor confidence in its dividend safety.
See More
Microsoft Faces Challenges Amid AI Stock Surge
- Investor Rotation Trend: As investors shift towards hotter AI stocks, Microsoft is being sold off as a source of funds, resulting in a 14.5% year-to-date decline, reflecting market concerns over its enterprise software business and the disruptive potential of AI startups.
- Financial Performance Analysis: While Microsoft's Productivity and Business Processes unit reported a 16% revenue increase to $35.01 billion in the latest quarter, its legacy segment remains the largest revenue source, highlighting vulnerabilities amid the AI wave.
- Cloud Business Outlook: The Intelligent Cloud segment achieved quarterly revenue of $34.68 billion, nearly double the growth rate of the legacy business, showcasing strong market demand despite concerns over Azure's reliance on its relationship with OpenAI.
- Market Reaction and Ratings: Although Goldman Sachs maintains a bullish outlook with a buy rating and a $610 price target for Microsoft, Jim Cramer expresses caution regarding its future performance, emphasizing the need for Microsoft to swiftly address challenges in its software licensing business.
See More
Jim Cramer's Charitable Trust Trading Update
- Goldman Sachs Trim: Jim Cramer's Charitable Trust sold 15 shares of Goldman Sachs at approximately $938 each, reducing its holdings to 170 shares and decreasing the portfolio weight from 4.5% to 4.15%, effectively locking in a 67% profit, showcasing a strategic move to capitalize on recent stock highs.
- Johnson & Johnson Increase: The Trust purchased 65 shares of Johnson & Johnson at around $223, increasing its total to 290 shares and raising its portfolio weight from 1.3% to 1.7%, reflecting confidence in the long-term growth potential of the healthcare sector despite current market disfavor.
- Healthcare Sector Confidence: Despite the underperformance of healthcare stocks, Cramer remains optimistic about Johnson & Johnson and other healthcare positions, noting that all three companies exceeded earnings expectations and raised their full-year outlooks, indicating strong fundamentals.
- Robotic Surgery System Milestone: Johnson & Johnson's Ottava robotic surgery system achieved a critical milestone in its first clinical study, paving the way for FDA approval, which supports the company's goal of double-digit revenue growth by the end of the decade.
See More
Markets Hit New Highs, AI Infrastructure Leads the Charge
- Market Performance: On Tuesday, markets continued to rise without new escalations in the Middle East conflict, with West Texas Intermediate crude down about 4% and the benchmark 10-year Treasury yield slightly lower, indicating increased investor confidence in the market.
- Tech Stocks Lead: Chipmakers like Intel, SanDisk, and Micron saw double-digit percentage gains, driving a strong overall performance for technology stocks, with Amazon, Broadcom, Alphabet, and Qnity hitting new 52-week highs, reflecting robust performance in AI-related stocks.
- Strong Earnings Boost Materials: The materials sector emerged as the top performer in the S&P 500, with DuPont being the biggest mover due to its strong earnings report, highlighting investor confidence and interest in the materials industry.
- Robotic Surgery System Progress: Johnson & Johnson announced that its Ottava robotic surgery system achieved primary endpoints in clinical studies for Roux-en-Y gastric bypass procedures, which is expected to support FDA approval for multiple upper abdominal surgeries, further solidifying its position in the robotic surgery market.
See More
