Johnson & Johnson (JNJ): Growth Engine at a Value Price

We just covered the 15 Safe Stocks to Invest In For Beginners and Johnson & Johnson (NYSE:JNJ) ranks 5th on this list.

Johnson & Johnson (NYSE:JNJ) has transformed from a slow-growth conglomerate into a pure play in innovative medicine and technology. This transformation is a direct result of the company spinning off its consumer health unit in 2023. Without the drag of lower-margin consumer products, the company is now growing revenue at 6%–7% annually. Elite investors view this as buying a growth engine at a value price. Earlier this month, the firm officially raised its full-year guidance to a midpoint of $100.8 billion. Growth is being driven by blockbuster drugs like Darzalex and Tremfya. Even with the patent cliff looming for Stelara, Wall Street is bullish on the 20+ new therapies JNJ plans to launch by 2030.

The acquisition of Shockwave Medical and Abiomed has positioned Johnson & Johnson (NYSE:JNJ) as a leader in high-growth cardiovascular tech, which hedge funds believe will drive margin expansion through 2027. The stock offers a level of financial security that is nearly unmatched in the corporate world. JNJ is one of only two US companies to hold a AAA credit rating, higher than the US government itself. In mid-April, it announced its 64th consecutive annual dividend increase to $1.34 per share. With a current yield of approximately 2.2%–2.3%, it serves as a reliable income floor while investors wait for the stock to re-rate.

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