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How Did Johnson & Johnson Perform Compared to Its Peers?

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Johnson & Johnson and its peers

An analysis of Johnson & Johnson’s income statement in 3Q15 follows:

  • The net profit margins of Johnson & Johnson (JNJ), Pfizer (PFE), Gilead Sciences (GILD), Merck & Co. (MRK), and Amgen (AMGN) are 19.6%, 22.2%, 54.6%, 7.0%, and 30.8%, respectively.
  • The EPS (earnings per share) of Johnson & Johnson, Pfizer, Gilead Sciences, Merck, and Amgen are $1.20, $0.42, $2.92, $0.24, and $2.15, respectively.

An analysis of Johnson & Johnson’s valuation follows:

  • The PE (price-to-earnings) ratios of Johnson & Johnson, Pfizer, Gilead Sciences, Merck, and Amgen are 16.8x, 23.4x, 10.3x, 14.5x, and 19.6x, respectively.

  • The PBV (price-to-book value) ratios of Johnson & Johnson, Pfizer, Gilead Sciences, Merck, and Amgen are 3.7x, 3.0x, 8.9x, 3.5x, and 5.4x, respectively.

As a result, the peers outperformed Johnson & Johnson based on the net profit margin.

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ETFs that invest in Johnson & Johnson

The Healthcare Select Sector SPDR Fund (XLV) invests 10.2% of its holdings in Johnson & Johnson. XLV tracks healthcare stocks from within the S&P 500 Index.

The iShares Dow Jones US Pharmaceuticals ETF (IHE) invests 9.7% of its holdings in Johnson & Johnson. IHE tracks a broad-based, cap-weighted-index of US pharmaceutical companies.

The iShares Dow Jones US Healthcare Sector ETF (IYH) invests 9.2% of its holdings in Johnson & Johnson. IYH tracks a cap-weighted index of pharmaceutical, biotechnology, healthcare services, and equipment companies in the US.

Comparing Johnson & Johnson and its ETFs

An analysis of Johnson & Johnson’s price movement follows:

  • The YTD (year-to-date) price movements of Johnson & Johnson, XLV, and IYH are -6.7%, 1.1%, and 0.74%, respectively.

An analysis of Johnson & Johnson’s valuation follows:

  • The PE ratios of Johnson & Johnson, XLV, and IYH are 16.8x, 24.4x, and 25.6x, respectively.
  • The PBV ratios of Johnson & Johnson, XLV, IHE, and IYH are 3.7x, 3.7x, 3.8x, and 3.8x, respectively.

The ETFs outperformed Johnson & Johnson based on the price movement, PE ratio, and PBV ratio.

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