Johnson & Johnson Stock: A Healthcare Giant with a Bright Future

RediksiaMonday, 8 January 2024 | 04:58 GMT+0000
Johnson & Johnson Stock: A Healthcare Giant with a Bright Future
Johnson & Johnson Stock: A Healthcare Giant with a Bright Future

DIKSIA.COM - () is one of the world's largest and most diverse companies, with operations in three segments: pharmaceutical, medical devices and diagnostics, and consumer. The company has a long history of innovation, quality, and social responsibility, and is well-known for its iconic brands such as Band-Aid, Tylenol, Neutrogena, and Listerine.

is also a reliable payer, having increased its payout for 59 consecutive years, making it a member of the prestigious Aristocrats list. The company currently offers a dividend yield of 2.96%, which is higher than the average of the S&P 500 index.

In this article, we will examine the strengths and challenges of Johnson & Johnson, and why its is a good for long-term growth and income.

Pharmaceutical Segment: A Key Growth Driver

The pharmaceutical segment is the largest and most profitable segment for Johnson & Johnson, accounting for close to 60% of its total revenue and operating income in the third quarter of 2023. The segment focuses on six therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases.

Johnson & Johnson has a strong pipeline of innovative drugs, with 14 new products launched since 2015, and 10 more expected to launch by 2025. Some of the key growth drivers in this segment include:

  • Stelara, a biologic drug for the treatment of psoriasis, psoriatic arthritis, and Crohn's disease. Stelara generated $7.6 billion in sales in 2022, up 16% year-over-year, and is expected to reach $10 billion by 2025.
  • Imbruvica, an oral therapy for the treatment of various types of blood cancers. Imbruvica is co-marketed with AbbVie, and generated $4.9 billion in sales in 2022, up 9% year-over-year. The drug is expected to grow further as it expands into new indications and markets.
  • Darzalex, a monoclonal antibody for the treatment of multiple myeloma, a type of blood cancer. Darzalex generated $4.2 billion in sales in 2022, up 39% year-over-year, and is expected to reach $9 billion by 2025. The drug is also being tested for other types of cancers and autoimmune diseases.
  • Tremfya, a biologic drug for the treatment of moderate to severe plaque psoriasis. Tremfya generated $1.4 billion in sales in 2022, up 28% year-over-year, and is expected to reach $3 billion by 2025. The drug is also being tested for psoriatic arthritis and Crohn's disease.
  • Erleada, an oral therapy for the treatment of prostate cancer. Erleada generated $1.1 billion in sales in 2022, up 66% year-over-year, and is expected to reach $2.5 billion by 2025. The drug is also being tested for other types of cancers.

Medical Devices and Diagnostics Segment: A Recovery in Progress

The medical devices and diagnostics segment is the second-largest segment for Johnson & Johnson, accounting for about 30% of its total revenue and operating income in the third quarter of 2023. The segment focuses on four areas: orthopedics, surgery, vision care, and interventional solutions.