Over the last number of months, bonds have been dropping and yields have been rising. As such, many of the more defensive stocks that trade along with bonds have also come down, and the best of which are now often trading at reasonable valuations for the first time in several years. Medical conglomerate Johnson & Johnson (JNJ) is one of those names.
Since its high in January, shares of J&J have fallen by some 18%, despite fundamentals remaining pretty good. In its first-quarter conference call, management re-affirmed full year 2018 guidance of between 6.8% and 9.6% EPS growth. Revenue guidance ex acquisitions was bumped from between 2.5%-3.5% to 3.5%-4.0%. J&J is a strong, diversified medical business, and I believe that its pharmaceutical and medical device businesses should do well even in an environment of higher inflation. This article looks at J&J's latest quarter, its expectations for 2018 and finally its valuation and expectations for the dividend.
