Portfolio Update
The FiveTwenty portfolio received $240.19 dividends in the past week. BMY, T, and VZ paid their quarterly dividend during the week.
| Past Week Dividend | $240.19 |
| Current Quarter Dividend (Q1 2023) | $526.19 |
| LifeTime Dividend | $8,634.63 |
| Estimated Annual Dividend | $8,246.09 |
The capital allocation for the week of 02/05/2022 to 02/11/2022 will be used to add to our position in Johnson & Johnson (NYSE: JNJ)
JNJ – Position Update
Since our last check-in on JNJ in week 33 of 2023, the company reported Q3 2022 earnings on 10/18/2022, and Q4 and FY 2022 earnings on 01/24/2023. Additionally, the share price decreased 0.4% from $165.30 to $164.61 during the period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 60 years | 60 years | |
| Yield | 2.70% | 2.61% | 2.64% |
| Payout Ratio | 43.80%1 | 43.14%2 | |
| P/E | 16.201 | 16.552 |
1 computed using TTM adjusted EPS of $10.15 as of Q4 2022
2 computed using TTM adjusted EPS of $9.99 as of Q2 2022
FY 2022 earnings report
Did JNJ’s latest earnings report raise any warning flags?
In Q4 2022, JNJ posted a 4.4% decrease in revenue compared to the year ago quarter. a 2.9% increase in sales for the US was more than offset by a 11.5% decrease in revenue internationally. However, the primary driver of the decline of revenue internationally has been the strong USD. On a constant currency basis international sales only declined 1.1% in the quarter.
Furthermore, despite a weaker Q4, JNJ revenue growth of 1.3% (6.1% on a constant currency basis) for FY 2022. Overall, revenues grew 1.3%, adjusted earnings increased 3.2% , and adjusted EPS were 3.6% higher than in FY 2021.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| 2021 | $93,775 | $26,195 | $9.80 |
| 2022 | $94,943 | $27,038 | $10.15 |
| % Change | 1.3% | 3.2% | 3.6% |
Additional noteworthy developments during the quarter:
- JNJ completed the acquisition of Abiomed during Q4 2022.
Looking ahead, JNJ projects revenue of between $96.9 to $97.9 billion for 2023, an increase of 4.5% to 5.5% over 2022. The company also expects adjusted EPS of $1045 to $10.65 an increase of 2.5% to 4.5% over FY 2022.
Thesis
Why are we adding to our position in JNJ?
Following, FY 2022 earnings report JNJ share price has dropped the level of our previous investment. This has created an opportunity to add to our long-term position at a similar valuation and better yield.
Furthermore, JNJ is continuing to demonstrate solid financial performance with its steady revenue growth. We do not currently see any warning signs for the long term prospects of the firm.
Previous Articles
- 2022 Week 33: Johnson & Johnson (NYSE: JNJ)
- 2022 Week 32: Johnson & Johnson (NYSE: JNJ)
- 2021 Week 17: Johnson & Johnson (NYSE: JNJ)
- 2021 Week 14: Johnson & Johnson (NYSE: JNJ)
Additional Research
Photo by Mishaal Zahed on Unsplash
One Reply to “2023 Week 6: Johnson & Johnson (NYSE: JNJ)”
Comments are closed.