We recently published a list of 10 Most Profitable Blue Chip Stocks to Buy Now. In this article, we are going to take a look at where Johnson & Johnson (NYSE:JNJ) stands against other most profitable blue chip stocks to buy now.
Blue chip stocks are large, financially stable companies with strong market presence, consistent profitability, and regular dividend payments. They are generally market leaders, with strong business models that are resilient across business cycles. Many blue chip stocks are included in the Dow Index (DJIA), so the index is often considered an indicator of their overall performance. Investors would typically flock to blue chip stocks in times of market volatility, economic uncertainty, or when the economy is in late-stage expansion, as these large-cap companies tend to offer stability and consistent returns versus smaller or riskier companies.
We believe that blue chip stocks, and the constituents of the Dow index in particular, represent a unique blend of the value and size factors, combining the financial stability, earnings consistency, and attractive market valuations typically associated with value stocks, with the scale and market dominance of large-cap companies. This dual exposure enhances their resilience in economic downturns and makes them well-positioned to outperform during recessions, when investors tend to shift towards quality and safer stocks. For reference, the Fama–French Three-Factor Model, introduced in 1993, concludes that incorporating exposure to several favorable factors can further enhance stock returns. In this context, both the value and large size factors outperformed in the last years, and especially year-to-date.
READ ALSO: 10 Most Profitable Large Cap Stocks to Buy Now
Our research indicates that recession fears and Trump Turmoil are likely to persist and potentially continue to favor the most profitable blue chip stocks over everything else. The US administration appears to be eroding the trust of investors through a plethora of unpredictable and contradictory moves – Trump appeared to soften his stance on the US-China trade war, saying that tariffs on Chinese goods “will not be as high as 145 per cent” and that “it’ll come down substantially, but won’t be zero”. While this represents a good signal at first glance, such actions are very likely to deter the US’s partners from negotiating for tariff exemption, simply because the current administration has become too unpredictable.
Our thoughts are confirmed by the VIX volatility index remaining elevated compared to the long-term trend, while the crude oil price remains in a downtrend, suggesting expectations of weaker industrial demand and a weaker economy. On the consumer side, there are reasons to believe that US consumers are getting more cautious than ever – the employee quits rate, as reported by FRED, declined substantially year-to-date and reached levels comparable to the aftermath of the 2008 financial crisis. When employees are reluctant to quit it means two things: (1) it is tough to get jobs out there, implying that the economy is slowing down, and (2) their expectation about the future becomes more pessimistic, which leads to less willingness to quit and potentially risk difficulties finding a new job. Both these factors mean the consumer spending will likely slow down in the following quarters, further pressuring GDP growth.
The key takeaway for the readers is that the odds of a recession and of a prolonged bear market still persist. In this context, the best hedging strategy would be to hold shares of companies that perform well in bull markets, but at the same time can offer protection against turmoil and recessions. Our belief is that the most profitable blue chip stocks are the best candidates, because they possess the wide moat and strong cash flow capacity to withstand any economic slowdown and even potentially absorb the incremental tariffs.
A smiling baby with an array of baby care products in the foreground.
Our Methodology
To compile our list of most profitable blue chip stocks to buy now, we screened for current and former members of the Dow Jones Industrial Average index and identified companies with the highest net income generated in the latest reported fiscal year. From that group, we picked companies with the highest net profit margin, which suggests sound financial health and excellent cost management. The stocks are ranked in ascending order of their net profit margin as of the most recent quarter. For each stock, we also included the number of hedge funds that own the stock as of Q4 2024, according to Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Johnson & Johnson (NYSE:JNJ)
Net Profit Margin: 24.4%
Last year’s net income: $24.24 billion
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) is a leading healthcare company focusing on developing treatments in complex areas such as oncology, immunology, neuroscience, and cardiovascular health. The company is known for products such as Darzalex, Stelara, and Tremfya. Its MedTech segment offers medical devices across orthopaedics, surgery, and vision care. JNJ ranked eighth on our recent list of 10 Best Low Risk Stocks To Buy in 2025.
Johnson & Johnson (NYSE:JNJ) delivered strong operational sales growth of 4.2% across their business in Q1 2025, with YoY sales increases in both the innovative medicine and MedTech segments. This growth was particularly impressive as the company managed to achieve it despite facing an approximate 810 basis point headwind from the STELARA product and the impact of Part D redesign. In Innovative Medicine, eleven key brands grew double digits, with DARZALEX continuing to set standards in multiple myeloma with over 20% growth and quarterly sales exceeding $3 billion.
Looking ahead, 2025 is positioned as a catalyst year that will set up accelerated growth through the second half of the decade and beyond. Johnson & Johnson (NYSE:JNJ) strengthened its portfolio through strategic moves, including the completion of the Intra-Cellular Therapies acquisition and a commitment to invest more than $55 billion in US manufacturing, R&D, and technology over the next four years. The company also demonstrated confidence in its future by increasing its dividend for the 63rd consecutive year and maintaining its adjusted reported earnings per share guidance of 6.2% at the midpoint, despite various headwinds, including tariffs. With more than $24 billion in net income generated in the latest fiscal year, JNJ is one of the most profitable blue-chip stocks on our list.
Overall, JNJ ranks 5th on our list of most profitable blue chip stocks to buy now. While we acknowledge the potential of JNJ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than JNJ but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
