Drugs Drive Growth For Johnson & Johnson


At 128 years old,Johnson & Johnson ( JNJ ) is still delivering growth and income for its shareholders.

It's not Band-Aid bandages and baby oil that's driving growth for the New Brunswick, N.J.-based health-care giant. Out of its three operating units, its pharmaceuticals segment has showed consistent growth in recent quarters. Last year, pharmaceuticals accounted for about 39% of total sales. That's up a touch from 38% in 2012.

In the latest four quarters, revenue from pharmaceuticals sales rose 10% to 11.7%. The company has seen strong demand for Remicade, a treatment for inflammatory diseases, and Velcade, which is used for multiple myeloma. Sales of new products such as its Zytiga prostate cancer treatment have also showed strength.

Johnson & Johnson has delivered single-digit earnings growth for 13 of the past 15 quarters. Sales were flat to down slightly in a couple of periods in 2012, but grew by single digits for seven straight quarters. Analysts polled by Thomson Reuters see earnings rising 7% to $5.88 a share this year. Profit is slated to rise 8% in 2015.

Johnson & Johnson is in the S&P 500 Dividend Aristocrats index, which tracks the performance of S&P 500 stocks that have increased dividends annually for at least 25 years. The company has boosted its shareholder dividend for 52 straight years.

J&J most recently announced a hike in April, when it raised its quarterly dividend to 70 cents a share from 66 cents. Its quarterly dividend has more than doubled in the past eight years.

On an annualized basis, Johnson & Johnson pays $2.80 a share, which works out to a yield of about 2.7%. Shares of J&J are trading near all-time highs, although the stock remains the steady performer it has been historically.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: JNJ

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