Johnson & Johnson (JNJ)

A major multinational, safe company. It has not done much in the last year, but you get an attractive dividend. The issue with healthcare is the pricing of pharmaceuticals. There is a lot of fear in the healthcare space. Currency will be a near term headache. Over time you will be just fine.

This is really 3 companies, pharmaceuticals, medical devices and consumer products. Great brand names with good pricing power. The one risk is the Pharma side where they don’t have many products in a late stage development. Trading at 16X earnings and pays a 2.92% dividend yield.

Likes this and would be a buyer at this point. The biggest risk in healthcare in the US is the kerfuffle over the pricing of drugs. If that comes apart, that could influence all healthcare stocks generally. This company would be hit much less than many of the others.

Best in class. It is tough to find a business that they haven’t taken a stake in and done pretty well at. Right now they have a pretty solid pipeline. The business is running pretty well. The one knock is that healthcare has a real bent against it right now. This company is fine, but not something he would run towards. There are a lot of outflows from healthcare, and a lot of it is driven by ETF’s.

This is a unique type of company. A large pharmaceutical company, but very diversified having 40% Pharma, 40% medical devices and 20% consumer. Trading at 15X earnings. Dividend yield of 2.97%.

He likes it and is looking at it right now. He likes the dividend and how it increases year after year. He likes the healthcare sector. He prefers disposable products more than pharma. It has not made anyone any money this year so it is now one to take a look at. He expects 7-9% return compounded over the next 10 years.

44% of their revenues are from pharmaceuticals. When you look at the healthcare space the pharmaceuticals are not the leaders in that particular area. Trading at 15-16 times forward earnings, with a pretty low growth rate of 6%-7% compound annual growth EPS. This puts it at a 2.6%X PEG ratio. Good dividend of 3%. Technically the stock is trading below falling moving averages, which is not a good trend.

Pretty fairly valued. Off its highs. The multiple got a little bit above its historical range. Decent dividend of over 3%. Lots of good products, both on the medical devices side as well as the pharmaceutical side. Thinks there are better ways to play the medical business. A good solid holding that will be around forever. The street consensus is $112 in 12 months, which is a fair target for it.

This has the pharmaceutical, devices as well as the consumer side. They are about one third each of the company. The Pharma side is doing very well. The consumer side has come on very well. The difficulty now is with the diagnostics and devices area, which is pulling the consolidated results down and making the stock just a little bit too expensive for him.

The low was in ’09. The breakout at the beginning of ’13. He thinks we are into consolidation before the final wave of growth. Be careful because the easy money has been picked.

Healthcare is an area he has been focusing on, but not on this one particularly. This is a conglomerate with the consumer side, healthcare and the pharma side. Trading below where the market is. Growth isn’t superb, but you are not really paying up for it. In times of a market uncertainty, that stability and defensiveness will really come into play. Pays a good dividend. This could be a good name for a portfolio.

Made up of about 40%-45% pharma with the rest split between diagnostics and consumer products. The Pharma side is doing very, very well. The consumer side is doing pretty well, but diagnostics and devices are not doing so well. Trading at a relatively rich multiple and their growth is somewhat muted.

Growth has moderated a little in the past couple of years. A big headwind for them in the short term is the stronger US$. He would like to see how the next quarter comes out and what their guidance is in Q3 before he bought the stock.

This is above 45% in the pharmaceutical space, and the rest is in devices, etc. Not necessarily his favourite when looking at pharmaceuticals. Trading at about 16X forward earnings with a 7% long-term growth and a 2.3 PEG ratio. When you get north of 2 it is a bit expensive.

Doing very well on the pharma side, but not as well on the medical device side. Their whole complex is having some difficulty with the US$, but are not alone there. When you look at the US$ and the effect it is having on companies and their results, you have to look at it as a transitory type of event. You are not going to have the same debilitating type of event quarter after quarter after quarter, unless the dollar continues to strengthen at the same rate. At this point, this company is just a little too pricey for him.