Johnson & Johnson Announces $5B Share Buyback - Analyst Blog

By Zacks Equity Research,

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Johnson & Johnson ( JNJ ) 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 any time.

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 View Again ).

Johnson & Johnson is a Zacks Rank #3 (Hold) stock. Some better ranked companies in the health care space include AbbVie ( ABBV ), Pfizer ( PFE ) and AstraZeneca ( AZN ). All three are Zacks Ranked #2 (Buy) stocks.

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Zacks Investment Research

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

This article appears in: Investing , Business , Stocks
Referenced Stocks: JNJ , ABBV , AZN , PFE

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