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The Best Johnson & Johnson Headlines in 2015

JNJ Dividend Chart
JNJ Dividend Chart

We can also lump in the company's announcement in October that it planned to repurchase $10 billion worth of its common stock from time to time. Repurchasing stock lowers the number of outstanding shares and has the potential to boost EPS, ultimately making a company look more attractive on a valuation basis and possibly lifting its share price.

Long story short, J&J continues to operate in the best interests of its shareholders year in and year out.

Rearranging the puzzle pieces

Finally, J&J's early March announcement that it was selling its Cordis business unit -- Cordis develops and manufactures vascular medical devices -- to Cardinal Health for an aggregate value of $1.99 billion is significant for a number of reasons.

Image source: Flickr user thetaxhaven.

Johnson & Johnson has been committed to enhancing its fastest-growing segments (primarily pharmaceuticals), and it's been looking to divest slower-growth assets. The divestment of Cordis to Cardinal Health generates additional cash that J&J can use for shareholder returns or to make earnings-accretive and complimentary acquisitions. J&J's management team implied during its latest earnings conference call that it's very much on the hunt for an acquisition, but it's also not in any hurry to make a deal. Keep in mind that J&J is comprised of around 250 subsidiaries, so the ongoing divestment of non-core assets appears to be a smart move to boost its already robust net cash position and to boost its long-term growth potential.

The deal isn't bad for Cardinal Health, either. An aging population should help boost Cordis' business over the long run. Cardinal Health anticipates that Cordis will begin adding roughly $0.20 in EPS to its bottom line beginning in 2017.

What's next for J&J?

Now that you have a better idea of what J&J's best headlines were from 2015, let's hit the most important question of all: Should you own J&J?

The answer is that it depends on your investing strategy, but I would certainly encourage long-term investors, and especially investors who are already retired, to consider adding J&J to their portfolios. J&J has an immaculate streak of dividend growth, a 31-year streak of adjusted EPS growth, and its diversified business provides cash flow in practically any economic environment. J&J's high-growth days may be history, but its cash flow consistency appears to suggest plenty of upside may be realized over the long run.

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The article The Best Johnson & Johnson Headlines in 2015 originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool recommends Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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


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

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