You'll Have to Hold This One for the Dividend

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    Published Tue, 17 Apr 2012 20:43:06 EDT on The Motley Fool


    Johnson & Johnson (NYSE: JNJ) gets a pass for the first quarter. No reason to sell, but nothing to get excited about, either.
    A 1.5% year-over-year increase in adjusted earnings isn't that bad, but it basically came from cost cutting. Revenue decreased 0.2% year over year.
    Consumer health-care products continue to need a bandage, with sales down 2.4%. The company is still struggling with issues from the ongoing recalls of over-the-counter products. Johnson & Johnson blamed the decrease on an "impact on production volumes," which I take as a good sign. It's not like its back up to full speed, and consumers aren't switching back from brands sold by Pfizer (NYSE: PFE), Bayer, and others. Of course, Johnson & Johnson had better hurry up and get back up to full speed; the longer the delay, the harder it will be to woo consumers back.
    Sales of medical devices, the company's largest segment, were lower, but that shouldn't have come as much of a shock, since the year-ago quarter included sales of drug eluting stents before Johnson & Johnson decided to abandon the space.
    The pharmaceutical segment was the only area where sales were up in the quarter, but it was a tale of two geographies. Stateside sales were down 10.8% as the company deals with generic competition for antibiotic Levaquin and manufacturing issues with cancer drug Doxil, which has led to rationing.
    In the rest of the world, pharmaceutical sales were up 16.5%, but that's slightly misleading since it includes the transfer of sales of Remicade from Merck (NYSE: MRK) after the dispute ended in a settlement.
    If you're looking for a bright spot to hang onto until next earnings season, it's J&J's prostate cancer drug, Zytiga, which is quickly approaching blockbuster status, selling $200 million worldwide in the first quarter. With new data showing that it works in patients earlier in their disease progression, it should take sales away from Sanofi's (NYSE: SNY) Taxotere and potentially Dendreon's (Nasdaq: DNDN) Provenge, although the latter is hoping to show that successive treatments are better than either treatment individually.
    The best reason to own Johnson & Johnson at this point is the solid 3.5% dividend yield. The health-care giant is a few years away from rapid sales increases that will drive the share price higher, but as this quarter showed, it's stable enough to justify owning it for the dividend alone while you wait.... Read more

    Stock name                                     ISIN Last trade   P/E Earnings/Share Dividend/Share Dividend yield
    MERCK & CO P/E of MERCK & CO on Bloomberg Quote of MERCK & CO on CNNMoney FT.com - MRK:NYS P/E ratio of MERCK & CO on Google Finance Dividend yield MERCK & CO on Morningstar Dividend MERCK & CO on MSN Money Dividend MERCK & CO on Reuters MERCK & CO dividend US5893311077 47.33   23.8 1.96 1.72 3.63
    PFIZER P/E of PFIZER on Bloomberg Quote of PFIZER on CNNMoney FT.com - PFE:NYS P/E ratio of PFIZER on Google Finance Dividend yield PFIZER on Morningstar Dividend PFIZER on MSN Money Dividend PFIZER on Reuters PFIZER dividend US7170811035 29.11   20.8 1.41 0.96 3.30
    JOHNSON & JOHNSON P/E of JOHNSON & JOHNSON on Bloomberg Quote of JOHNSON & JOHNSON on CNNMoney FT.com - JNJ:NYS P/E ratio of JOHNSON & JOHNSON on Google Finance Dividend yield JOHNSON & JOHNSON on Morningstar Dividend JOHNSON & JOHNSON on MSN Money Dividend JOHNSON & JOHNSON on Reuters JOHNSON & JOHNSON dividend US4781601046 87.21   24.0 3.68 2.64 3.03
    SANOFI-AVENTIS P/E of SANOFI-AVENTIS on Bloomberg Quote of SANOFI-AVENTIS on CNNMoney FT.com - SNY:NYS P/E ratio of SANOFI-AVENTIS on Google Finance Dividend yield SANOFI-AVENTIS on Morningstar Dividend SANOFI-AVENTIS on MSN Money Dividend SANOFI-AVENTIS on Reuters SANOFI-AVENTIS dividend US80105N1054 54.56   22.8 2.41 1.44 2.64
    DENDREON P/E of DENDREON on Bloomberg Quote of DENDREON on CNNMoney FT.com - DNDN:NSQ P/E ratio of DENDREON on Google Finance Dividend yield DENDREON on Morningstar Dividend DENDREON on MSN Money Dividend DENDREON on Reuters DENDREON dividend US24823Q1076 4.01   0.0 0.00 0.00 0.00

    MERCK & CO - MRK  


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