Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Johnson & Johnson (JNJ)

Company Dividend Discount ModelIndustry: Drug Manufacturers - GeneralSector: Healthcare

Valuation Snapshot

Stable Growth$133.25 - $231.87$175.47
Multi-Stage$274.44 - $301.80$287.86
Blended Fair Value$231.67
Current Price$181.62
Upside27.56%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.58%4.29%4.884.854.824.554.324.093.923.693.563.37
YoY Growth--0.45%0.75%5.89%5.26%5.69%4.46%6.16%3.74%5.48%5.21%
Dividend Yield--2.94%3.08%3.07%2.58%2.64%3.08%2.82%2.96%2.85%3.10%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)25,119.00
(-) Cash Dividends Paid (M)12,234.00
(=) Cash Retained (M)12,885.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)5,023.803,139.881,883.93
Cash Retained (M)12,885.0012,885.0012,885.00
(-) Cash Required (M)-5,023.80-3,139.88-1,883.93
(=) Excess Retained (M)7,861.209,745.1311,001.08
(/) Shares Outstanding (M)2,424.652,424.652,424.65
(=) Excess Retained per Share3.244.024.54
LTM Dividend per Share5.055.055.05
(+) Excess Retained per Share3.244.024.54
(=) Adjusted Dividend8.299.069.58
WACC / Discount Rate6.00%6.00%6.00%
Growth Rate-0.20%0.80%1.80%
Fair Value$133.25$175.47$231.87
Upside / Downside-26.63%-3.38%27.67%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)25,119.0025,319.1725,520.9425,724.3225,929.3226,135.9526,920.03
Payout Ratio48.70%56.96%65.22%73.48%81.74%90.00%92.50%
Projected Dividends (M)12,234.0014,422.6516,645.4018,902.6621,194.8423,522.3624,901.03

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.00%6.00%6.00%
Growth Rate-0.20%0.80%1.80%
Year 1 PV (M)13,470.7713,605.7613,740.74
Year 2 PV (M)14,520.7614,813.2315,108.61
Year 3 PV (M)15,401.6015,869.2416,346.26
Year 4 PV (M)16,129.4916,785.7717,461.87
Year 5 PV (M)16,719.3317,573.9618,463.18
PV of Terminal Value (M)589,190.80619,307.84650,644.05
Equity Value (M)665,432.76697,955.79731,764.70
Shares Outstanding (M)2,424.652,424.652,424.65
Fair Value$274.44$287.86$301.80
Upside / Downside51.11%58.49%66.17%

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