Is Johnson & Johnson a Buy After Nearly Tripling Its Profit? - InvestingChannel

Is Johnson & Johnson a Buy After Nearly Tripling Its Profit?

Healthcare company Johnson & Johnson (NYSE:JNJ) released its year-end results last week. Sales for the fourth quarter totaled $24.8 billion and rose 10.4% year over year. The company’s diluted per-share profit of $1.77 also soared more than 172% from the prior-year period. Johnson & Johnson benefited from a higher gross margin and a reduction in other nonoperating expenses, which this past quarter totaled just $9 million versus $2.4 billion a year ago (this includes the company’s litigation expenses).

Leading the growth for the company in Q4 was its pharmaceutical business. At $14.3 billion in revenue for the period, it was a year-over-year improvement of 16.5%. Included in that total is $1.6 billion in sales from its COVID-19 vaccine. Without that, the growth rate would have been a more modest 3.3%. Its medical devices business also generated growth of 4.1%, followed by the consumer health business which posted sales growth of 1.1%.

Overall, it was a good quarter for the company but given the noise from the COVID-19 revenue and a sharp decline in other expenses, it wasn’t as impressive as it appeared to be at first glance. For 2022, the company anticipates that its adjusted operational sales will rise by as much as 8.5% including COVID-19 revenue and 7.5% without it.

In the past year, shares of Johnson & Johnson have been flat. There hasn’t been much excitement around the stock but with a solid dividend yield of 2.5%, which is higher than the S&P 500 average of 1.3%, it can make for a safe option for investors to park their money.

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