Johnson & Johnson (JNJ)

Trades at a higher multiple, because it is a better quality company. Very well-managed. There are 3 income streams 1) pharmaceuticals, 2) devices and 3) the consumer. This is basically international. The dividend is likely to grow, but slowly. This is a name that will hold up if we get market declines. He wouldn’t expect significant growth.

8% of a portfolio. A fabulous company, and it could go higher. Has a really good pipeline of drugs under development, and could be one of the faster growing drug companies in the next 2-3 years. However, it recently hit a 52 week high. He would Sell maybe 10%-20% of your holdings, which would still leave you with a very significant holding. Doesn’t like to have things much over 6%-7% of his fund, and you should follow similar rules. However, from a valuation standpoint, it is not cheap, but does have upside because it is such a pure name. It also has defensive characteristics.

One of the leading diversified healthcare companies. They have deep pharmaceuticals and are leaders in medical devices. Has had a fairly good run, and trading well above its trading 52 week forward earnings multiple. Sees this as one of the dominant players in the space.

Kind of a healthcare conglomerate. They have the Pharma side, consumer side and devices. Demographically strong. World-class brands and world-class products. The valuation might be a tad rich, but a great company.

Classic defensive, great company, full valuation. If you don’t care that it goes down when people allocate capital out to get more offensive in their portfolio, that it is fine. He would expect to see that once the economy starts to grow and people start getting more and more focused on inflation, he would see this as a source of capital. Sold his holdings late last year. This is not that cheap. Dividend yield of 2.8%.

Involved in a number of different areas including devices, consumer products and pharmaceuticals. Pharmaceuticals have grown to a point where they represent about half the business. The other 2 are pretty much equally split. The area they have really fallen down on is their hepatitis C drug, which has just not competed against Gilead’s. Also, there has been news about their talcum powder which has some carcinogenic properties. Also, it is trading close to 20X earnings.

Trading at 17X forward earnings, basically at the market valuation, with a similar expected growth rate. Would prefer to see them at a 16X forward earnings, $110. Doesn’t see too much growth or new acquisitions on the horizon.

One of those bellwether companies in healthcare. They have their tentacles in all types of healthcare, drugs, equipment, consumers, etc. A good core play for the portfolio. This should continue to move higher, but will have pullbacks along the way. Use any weakness to get in.

He likes the chart on this. Ever since the January lows, it has finally broken out and has started moving higher. Trading above the 50 and 200 day moving averages, so from a technical perspective, there are no complaints. On valuations it is trading at 17X earnings with a 6% or 7% growth rate, which makes it a little expensive. Nice dividend at 2.8%, and they are probably going to grow that over time. Likes their diversification within the drug space, medical device space and the consumer product space. One name that might be a little cheaper and that he likes a little more, would be AbbVie (ABBV-N). However, if you own this, there is no reason to Sell until it breaks down a bit.

(A Top Pick May 12/15. Up 16.45%.) A diversified Pharma, consumer products and medical devices company. They have 10 drugs over the next 3 years that have the potential of $1 million each. She still likes it. Still a buy.

A solid US play on pharmaceuticals and personal consumer products related to healthcare. One of the few companies that has an AAA rated balance sheet. Has a long history of growing dividends. The pipeline pharmaceutical expiry timeline is manageable. Have some emerging-market exposure which primarily hurts them somewhat on the currency side. If you are going to hold this for the long-term of 5-10 years, he would Buy it now. On a shorter time period, you might want to wait for a pullback.

A fabulous company. Have had their hiccups over the years. They are in 3 major areas including consumers, devices and pharmaceutical. The pharmaceutical area has done the best, and is now pushing 45% of their business. Well-managed and a great balance sheet. Valuation is somewhat high at about 20X earnings.

A high-quality healthcare name in pharmaceuticals, consumer products and medical devices. Has done quite well this past year because of its defensive nature. You might want to wait before buying. Dividend yield of 2.7%, and have increased this over 50 years. Very strong balance sheet.

A unique company in that it has 3 parts, medical devices, Pharma and consumer products. Well diversified, unlike the pure Pharma industry. A great dividend yield of almost 3% and not trading at a huge multiple. Every year they slowly increase their dividend. Incredibly well run and stable.

(Top Pick Mar 12/15, Up 9.62%) She continues to like and hold it. She likes their healthcare and pharma with lots of drugs in the pipeline. They are well diversified and increased their dividend every year for over 50 years. Nice defensive name. She still thinks they can grow their earnings.