JNJ’s medical devices and diagnostics segment is the second-largest of its three divisions, accounting for about 30% of its total revenue and 20% of its operating income in 2020. The segment offers a wide range of products and solutions for orthopedics, surgery, vision care, interventional solutions, and diabetes care. JNJ is the global leader in orthopedics, with a market share of about 25%, and has a strong presence in other segments such as contact lenses, surgical instruments, and wound care. JNJ is also investing in digital surgery, robotics, and biosensors, which are expected to drive future growth and innovation in the medical devices and diagnostics market.
JNJ’s consumer segment is the smallest of its three divisions, accounting for about 15% of its total revenue and 10% of its operating income in 2020. The segment offers a variety of products for baby care, beauty, oral care, over-the-counter drugs, and women’s health. JNJ has some of the most trusted and recognized brands in the world, such as Johnson’s, Aveeno, Neutrogena, Listerine, Tylenol, and Motrin. JNJ is also focused on enhancing its portfolio by divesting low-growth and low-margin businesses, such as its talc-based baby powder and its diabetes device unit, and acquiring high-growth and high-margin businesses, such as the skin-care brand Dr. Ci:Labo and the hair-care brand OGX.
JNJ Stock: A Stable and Growing Performer
Another reason why JNJ stock is a healthy choice for investors is its stable and growing financial performance, which reflects its diversified and resilient business model. JNJ has delivered positive revenue and earnings growth for 37 consecutive years, and has increased its dividend for 59 consecutive years, making it one of the few dividend kings in the market. JNJ has also maintained a strong balance sheet, with a net cash position of $9.7 billion and a credit rating of AAA, the highest possible rating, as of the end of 2020.
In 2020, despite the challenges posed by the Covid-19 pandemic, JNJ reported revenue of $82.6 billion, up 0.6% year-over-year, and adjusted earnings per share of $8.03, up 3.9% year-over-year. JNJ also generated free cash flow of $20.2 billion, up 16.7% year-over-year, and returned $10.5 billion to shareholders through dividends and $5.5 billion through share repurchases. JNJ also raised its quarterly dividend by 6.3% to $1.01 per share, representing a payout ratio of 50% and a yield of 2.5%.
