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Johnson & Johnson (JNJ) is one boring stock today. The Q1 numbers failed to catalyze either a buying or selling party. As I write this, shares are down about 0.2%. Volume is relatively tame, too.
According to the press release, net sales for the health-care entity increased 4%, driven by international territories and currency exchange (domestic revenue actually went down 5%). Net income was $1.29 per share on an adjusted basis, an increase of only 2.4% compared to the year-ago period.
Bloomberg BusinessWeek indicates an expectation of $1.27 per share. So we've got a two-penny beat. Unfortunately, the news service also mentions a reduction in the company's fiscal-year projections. Instead of net income coming in somewhere between $4.85 and $4.95 per share, it will now most likely fall somewhere between $4.80 and $4.90 per share. Management says the reason for the alteration is centered on the evolution of the currency landscape.
Here's the deal with J&J: if you own shares, keep holding them. This investment idea is best utilized in a core portfolio, where cost-basis-improving additions are constantly made. In fact, Steven Halpern recently highlighted some analyst commentary which essentially portrays the stock as one of the best dividend plays out there. It's true. The total-return potential on this one is a proven phenomenon, at least in my opinion.
So, I definitely think this is one for all the non-traders out there. If you're a trader, I probably would skip J&J and look for some other vehicle.
Disclosure: I don't own any company mentioned; positions can change without notice.
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