Investment Thesis
Both Pfizer (PFE) and Johnson & Johnson (JNJ) are among the leading pharmaceutical companies in the world where J&J’s business also extends to consumer health products, and medical devices. Both companies have built strong development team that allows them to continue to develop new drugs and products to keep up its competitive advantage against other competitors. In this article, we will compare two companies’ financial and operating metrics, financial health, dividend growth potential, and help readers to identify their growth potential.
Past Performance
Let us first take a look at J&J and Pfizer’s past performance. The following is the chart of J&J and Pfizer’s stock performance in the past 5 years. In the past 5 years, S&P 500 index generated about 70% return. As can be seen, J&J’s return of 90.25% was above S&P 500 as the company consistently grew its revenue and net income. On the other hand, Pfizer’s return of 46.7% was below S&P 500’s return as the company lacks a clear growth strategy: the company at some point considered to split its businesses; it also went through series of merger & acquisitions in which a few attempts were unsuccessful.
