Dividends4Life: Reasons to Buy Misunderstood JNJ Stock

Reasons to Buy Misunderstood JNJ Stock

Posted by D4L | Friday, March 06, 2015 | | 0 comments »

Johnson & Johnson (NYSE:JNJ) might seem like the dud of the Dividend Aristocrats so far this year, with the stock down about 7% and fourth-quarter sales giving investors a little pause. But if you dig a little deeper into its business and Q4 report, you’ll find that JNJ is actually a diamond in the rough. JNJ disappointed some investors after it reported that Q4 sales were down 0.6% year-over-year. But Johnson & Johnson did beat the consensus estimate for earnings per share by 1 cent, and profits overall were up 2.5% from the year-ago period.

Before you write JNJ stock off as dead money, consider these three reasons why you should stick with Johnson & Johnson in 2015. 1. JNJ Sales Were Better Than You Think: Although sales for Johnson & Johnson’s Hepatitis C drug Olysio were down, CEO Alex Gorksy expected this to happen. 2. Of Course, There’s the Dividend: JNJ is a Dividend Aristocrat that has increased its payout every year for 52 years, including its most recent increase of 6% to 70 cents quarterly. 3. Promising New Investment: JNJ is making strategic investments that will only make Johnson & Johnson stronger. 4. Johnson & Johnson Reasonably Priced: JNJ currently has a price-to-earnings ratio under 18, making it an undervalued stock compared to its competitors.

Source: InvestorPlace

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