Johnson & Johnson
) announced its plan to buy back up to $5 billion of its common
stock. As of Jun 29, 2014, the company had approximately 2.8226
billion shares of common stock outstanding. We expect investors to
react positively to the news and the share price to climb higher.
The company said that there is no specific timeline for the buyback
and also mentioned that it may suspend or withdraw the program at
Meanwhile, Johnson & Johnson declared a cash dividend of 70
cents per share on the company's common stock for the third quarter
of 2014. The dividend is payable on Sep 9, 2014. The dividend will
be paid to shareholders of record as of Aug 26, 2014. The
ex-dividend date is Aug 22, 2014. The payout is in line with the
dividend declared in the previous quarter.
We note that the company's repurchase plan comes close on the heels
of its strong performance in the second quarter of 2014. Johnson
& Johnson's second-quarter 2014 earnings were $1.66 per share,
well above the Zacks Consensus Estimate of $1.54. This was the 14th
successive time the company surpassed our expectations. Alongside
second quarter results, the company also upped its 2014 earnings
guidance (read more:
Johnson & Johnson Beats on Q2 Earnings, Ups
Johnson & Johnson is a Zacks Rank #3 (Hold) stock. Some better
ranked companies in the health care space include
). All three are Zacks Ranked #2 (Buy) stocks.
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