Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Johnson & Johnson (NYSE:JNJ) in relation to its major competitors in the Pharmaceuticals industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in the industry.
Johnson & Johnson Background Johnson & Johnson is the world's largest and most diverse healthcare firm. Three divisions make up the firm: pharmaceutical, medical devices and diagnostics, and consumer. The drug and device groups represent close to 80% of sales and drive the majority of cash flows for the firm. The drug division focuses on the following therapeutic areas: immunology, oncology, neurology, pulmonary, cardiology, and metabolic diseases. The device segment focuses on orthopedics, surgery tools, vision care, and a few smaller areas. The last segment of consumer focuses on baby care, beauty, oral care, over-the-counter drugs, and women's health. The consumer group is being divested in 2023 under the new name Kenvue. Geographically, just over half of total revenue is generated in the United States.
CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth| Johnson & Johnson | 30.86 | 5.62 | 4.82 | 5.78% | $6.82 | $14.6 | 7.3% |
| Eli Lilly and Co | 132.70 | 67.89 | 20.37 | 19.91% | $3.03 | $7.57 | 28.1% |
| Novo Nordisk A/S | 46.12 | 35.96 | 16.62 | 22.01% | $28.51 | $55.85 | 36.95% |
| Merck & Co Inc | 923.29 | 7.94 | 5.61 | 11.87% | $6.95 | $11.7 | 6.71% |
| Novartis AG | 25.07 | 4.50 | 4.61 | 19.99% | $4.18 | $8.75 | 7.39% |
| AstraZeneca PLC | 33.67 | 5.08 | 4.37 | 2.52% | $2.18 | $9.72 | 7.29% |
| Bristol-Myers Squibb Co | 13.30 | 3.53 | 2.37 | 6.03% | $4.45 | $8.73 | 0.62% |
| Zoetis Inc | 38.79 | 18.02 | 10.64 | 10.42% | $0.83 | $1.49 | 8.48% |
| GSK PLC | 13.93 | 5.08 | 2.26 | 2.64% | $1.78 | $5.63 | -1.17% |
| Takeda Pharmaceutical Co Ltd | 39.04 | 1.02 | 1.66 | -0.69% | $202.28 | $699.51 | 4.07% |
| Viatris Inc | 8.85 | 0.77 | 1.04 | 1.59% | $1.22 | $1.69 | -3.34% |
| Dr Reddy's Laboratories Ltd | 20.31 | 3.96 | 3.91 | 5.29% | $22.42 | $42.2 | 6.57% |
| Jazz Pharmaceuticals PLC | 154.66 | 2.32 | 2.36 | 4.19% | $0.33 | $0.87 | 3.35% |
| Average | 120.81 | 13.01 | 6.32 | 8.81% | $23.18 | $71.14 | 8.75% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } Through a detailed examination of Johnson & Johnson, we can deduce the following trends:
- With a Price to Earnings ratio of 30.86, which is 0.26x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
- With a Price to Book ratio of 5.62, significantly falling below the industry average by 0.43x, it suggests undervaluation and the possibility of untapped growth prospects.
- Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 4.82, which is 0.76x the industry average.
- The Return on Equity (ROE) of 5.78% is 3.03% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
- The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $6.82 Billion, which is 0.29x below the industry average. This potentially indicates lower profitability or financial challenges.
- Compared to its industry, the company has lower gross profit of $14.6 Billion, which indicates 0.21x below the industry average, potentially indicating lower revenue after accounting for production costs.
- The company's revenue growth of 7.3% is significantly below the industry average of 8.75%. This suggests a potential struggle in generating increased sales volume.
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By evaluating Johnson & Johnson against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
- Johnson & Johnson has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.43.
- This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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