Johnson & Johnson: A Good Value In This Overheated Market

Johnson & Johnson is a blue chip dividend aristocrat

When I think of Johnson & Johnson (JNJ), I can’t help but think of high quality. Many refer to the stock as a health care mutual fund, with its broad diversification in the health care industry.

The stock is the largest component of the Health Care Select Sector SPDR fund (XLV). This is no surprise with its broad footprint across healthcare. Below is the breakdown of total sales globally by segment:

  1. Consumer Sales: 17%
  2. Pharmaceutical Sales: 49%
  3. Medical Devices: 34%

The diversification within the health sector is important, since different segments have varying risks. For example, pharmaceuticals have pipeline risk, and medical devices have other risks, such as regulatory ones when Obamacare imposed a tax on medical devices.

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