In this informative article, I have a look at Johnson & Johnson (JNJ), a diversified healthcare company. We will assess it as a collateral investment. Quite simply, we will examine the industry, the business’s financial statements and the valuations. Typically, healthcare companies are non-cyclical. The firms routinely have steady cash moves and high dividend produces.
Drug companies and medical device companies have, historically, created value for investors. Their comeback on spent capital has been higher than their weighted average cost of capital. The industry typically has high obstacles to admittance. For drug manufacturers, you have the threat of substitute products when their proprietary drugs are off patent.
Initially, their customers don’t have much, if any, bargaining power. And the industry typically isn’t supplied with unionized labor. The suppliers of labor don’t have much, if any, bargaining power. Pharmaceuticals and medical devices are mature industries with little if any growth, industry consolidation, and high obstacles to entry. Industry growth is bound to replacement inhabitants and demand development. The companies must have brand loyalty and efficient cost structures.
The industry usually avoids price wars. Companies in the industry with superior products are likely to gain market share and experience above-industry-average growth and success. However, the industry does face a potential threat from biotech. 23.85 billion. Johnson & Johnson became less liquid during the second quarter. 55.32 billion. Johnson & Johnson remain liquid and solvent. 16.48 billion. The gross profit percentage remained the same at 68.8 percent of sales. 2 billion other expenditures in 2012’s second one-fourth.
1.41 billion. Dividends per talk about were more than revenue per talk about. The dividend increased 7 percent compared to the year-ago quarter. 256 million in 2012’s second one-fourth. 3.61 billion in 2011’s second quarter. In the first half a year of 2012 earnings were high quality. Johnson & Johnson didn’t create enough cash from procedures to pay cash used in investing activities. 17 billion with an acquisition.
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- Weak cash circulation
- Dimensions: 9.69″ h x .54″ w x 7.44″ l, .96 pounds
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4.6 billion on funding activities. Most of the investment property on funding activities was on dividends and the retirement of short-term personal debt. Consumer portion sales dropped 4.6 percent in the next quarter. That follows a decrease in the first one-fourth of 2012. Both are compared with the year-ago one-fourth. Pharmaceutical sales increased 0.9 percent in the second quarter. That comes after an increase of 1 1.2 percent in the first quarter. Both are weighed against the year-ago one-fourth.
There was a 93.3 percent drop in sales of Levaquin/Floxin in the first one-fourth compared with the year-ago quarter. In the next quarter, sales dropped 92.4 percent. The decrease in sales was due to the lack of market exclusivity in America. The decrease in sales of Levaquin/Floxin appears to be an extreme case of a drop in sales the effect of a loss of market exclusivity.