Johnson & Johnson (NYSE: JNJ) is one of the world’s largest and most diversified healthcare companies. It has been a staple in long-term investment portfolios due to its strong financial performance, dividend payouts, and steady growth. As the company prepares to release its Q3 2024 earnings on October 15, analysts anticipate an earnings per share (EPS) of $2.17, a decline from $2.66 in the same period last year. Meanwhile, revenue is expected to increase to $22.14 billion from $21.35 billion.
While these numbers offer commentary on the company’s present performance, a more compelling question for investors is, ‘What if you had invested in Johnson & Johnson stock 20 years ago?
The growth of a $1,000 investment in Johnson & Johnson
Twenty years ago, Johnson & Johnson’s stock was trading at approximately $31.57 per share. If you had invested $1,000 at that time, you would have been able to purchase about 32 shares of the company’s stock. Fast forward to today, with shares now trading at $158.56, your initial investment would be worth $5,022 just from price appreciation.
However, this calculation doesn’t include one of Johnson & Johnson’s most attractive features for long-term investors—its consistent dividend payments.
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How much did you earn in D
Dividends?
Johnson & Johnson has been known for its strong commitment to rewarding shareholders through dividends. Over the last 20 years, the company has paid out approximately $49.145 per share in dividends. If you had held onto those 32 shares, you would have earned about $1,556 in dividends alone.
Total returns over 20 years
When we combine the stock price appreciation ($5,022) with the accumulated dividends ($1,556), the total value of your investment today would be $6,578. This represents a total return of approximately 557.8% on your initial $1,000 investment.
To put this return into perspective, the S&P 500 delivered a total return of 549.37% over the same period. This means that Johnson & Johnson slightly outperformed the overall market, making it a solid long-term investment choice.
Johnson & Johnson’s prospects
Looking ahead, what could the next 20 years bring for Johnson & Johnson investors? The company remains a dominant player in the healthcare industry, with strong growth drivers in pharmaceuticals, medical devices, and consumer health products.
According to analysts, Johnson & Johnson currently holds a Neutral rating with a price target of $169.27, implying a potential upside of 6.7% from its current price.
In its Q2 2024 earnings report, the company showcased strong performance in its medtech and innovative medicine divisions. Johnson & Johnson reported an adjusted EPS of $2.82, up 10.2% year-over-year, surpassing analyst expectations of $2.70. Meanwhile, revenues increased 4.3% year-over-year to $22.45 billion, exceeding the consensus estimate of $22.31 billion.
CEO Joaquin Duato expressed confidence in the company’s growth trajectory, citing advancements in RYBREVANT and TREMFYA, the integration of Shockwave Medical, and the expansion of ACUVUE OASYS MAX 1-Day contact lenses as key factors driving future performance.
Johnson & Johnson reaffirmed its 2024 full-year revenue guidance of $88 billion to $88.4 billion, with an expected adjusted EPS between $9.97 and $10.07. This reflects the impact of recent acquisitions, including Proteologix and NM26 Bispecific Antibody, which are expected to strengthen the company’s pharmaceutical pipeline.
Is Johnson & Johnson still a good investment?
For income-focused investors, Johnson & Johnson remains an attractive option due to its 3.13% dividend yield, consistent dividend increases, and a strong history of stock price appreciation. The company has increased its dividend for over 60 consecutive years, earning it a spot among the Dividend Kings—a prestigious group of companies known for their exceptional track records in dividend growth.
While the stock may not deliver explosive short-term gains, it continues to be a reliable choice for long-term investors seeking stability, passive income, and steady growth. With its diversified business model and ongoing investments in innovation, Johnson & Johnson is well-positioned to maintain its reputation as a blue-chip investment for years to come.
