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JNJ VS. PFE: Which Is The Better Large Cap Pharmaceutical Stock?
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With market caps in the triple-digit billions, Johnson & Johnson (JNJ - Free Report) and Pfizer Inc. (PFE - Free Report) are two large cap pharmaceutical stocks that many investors like to keep in their portfolio for their relative stability. Large cap stocks tend to be go-to picks for investors, as they tend to be less volatile than most other stocks. They also tend to offer solid dividend payments that help to limit downside risk, in addition to providing income to investors.
JNJ and PFE are both Zacks Rank #2 (Buy) stocks, and the Large Cap Pharmaceutical Industry is currently ranked 26th out of 265 industries by Zacks, placing it in the top 10% of all industries. While they share the same Zacks Rank and operate in the same strong industry, the stocks differ from each other in what they can offer to investors:
Johnson & Johnson is engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The company operates in three segments: Consumer, Pharmaceuticals, and Medical Devices and Diagnostics. JNJ is a long-term, proven winner, as the company raised its dividend every year since 1961, a 54-year streak, and has produced a return of 175% just since 2005.
As mentioned the company is a Zacks Rank #2 (Buy) stock currently, and also has a Momentum Style Score of an A for the recent success the stock has seen. The company is up nearly 20% thus far in 2016, and dating back 52 weeks JNJ has a price change of nearly 23%. The trend upwards could continue too with JNJ’s growth projections.
JNJ is projected to see its sales hit $71.64 billion this year, which would represent year-over-year growth of 2.23%, and sales in 2017 are projected to grow another 4.53%. The company’s earnings are also projected for solid growth, with projected EPS growth of 6.40% this year, and another 6.08% of growth projected for next year.
Johnson & Johnson has long been a well-performing blue chip stock, and is likely to continue to do so moving forward. With a forward PE ratio of 18.63 and a dividend yield of 2.60% that is likely to grow given the company’s history, JNJ offers solid value to income and value investors, as well as being attractive to momentum investors given its run of success.
Pfizer Inc. is a research-based, global pharmaceutical company that discovers, develops, manufactures, and markets medicines for humans and animals. The company’s diversified global healthcare portfolio includes human, biologic and small molecule medicines and vaccines, as well as nutritional products and healthcare products.
Pfizer too is a Zacks Rank #2 (Buy) stock currently, and offers investors good bang for their buck with a B Value Style Score. This Style Score can be attributed to a low PE ratio of 14.72, an earnings yield of 6.85%, and a cash to price ratio of 10.81. The company also offers a solid dividend yield of 3.32%, making it attractive as an income and value investment.
Shares of PFE are up more than 12% year-to-date, and could be poised to finish the year even higher thanks to its projected growth in sales and earnings. The company has current year projected sales growth of 7.74%, in addition to projected EPS growth of 11.57%. PFE’s current year earnings estimate has soared from recent analyst revision activity, jumping from $2.28 90 days ago to the current estimate of $2.45.
With a solid dividend yield, PFE offers income for investors and some protection against downside risk in the recent volatile market. The company has a positive growth outlook too, and its solid value provides investors with an interesting investment opportunity.
Bottom Line
Armed with a high Zacks Rank, investors should consider both stocks. Both offer a solid dividend payment, though PFE’s is higher, for those looking for income, and each stock has other positives behind it. JNJ is a strong performer thus far this year and has proven over a long period of time that is a stable, growing stock, both in regards to its share price and its dividend payment.
PFE is more of an income and value play for investors, with a higher dividend yield and lower PE ratio. Both stocks look strong at the moment, and it is really up to investors to choose between the two on which attributes they tend to look for when making their stock picks.
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JNJ VS. PFE: Which Is The Better Large Cap Pharmaceutical Stock?
With market caps in the triple-digit billions, Johnson & Johnson (JNJ - Free Report) and Pfizer Inc. (PFE - Free Report) are two large cap pharmaceutical stocks that many investors like to keep in their portfolio for their relative stability. Large cap stocks tend to be go-to picks for investors, as they tend to be less volatile than most other stocks. They also tend to offer solid dividend payments that help to limit downside risk, in addition to providing income to investors.
JNJ and PFE are both Zacks Rank #2 (Buy) stocks, and the Large Cap Pharmaceutical Industry is currently ranked 26th out of 265 industries by Zacks, placing it in the top 10% of all industries. While they share the same Zacks Rank and operate in the same strong industry, the stocks differ from each other in what they can offer to investors:
Johnson & Johnson (JNJ - Free Report)
Johnson & Johnson is engaged in the research and development, manufacture, and sale of a range of products in the healthcare field. The company operates in three segments: Consumer, Pharmaceuticals, and Medical Devices and Diagnostics. JNJ is a long-term, proven winner, as the company raised its dividend every year since 1961, a 54-year streak, and has produced a return of 175% just since 2005.
As mentioned the company is a Zacks Rank #2 (Buy) stock currently, and also has a Momentum Style Score of an A for the recent success the stock has seen. The company is up nearly 20% thus far in 2016, and dating back 52 weeks JNJ has a price change of nearly 23%. The trend upwards could continue too with JNJ’s growth projections.
JNJ is projected to see its sales hit $71.64 billion this year, which would represent year-over-year growth of 2.23%, and sales in 2017 are projected to grow another 4.53%. The company’s earnings are also projected for solid growth, with projected EPS growth of 6.40% this year, and another 6.08% of growth projected for next year.
Johnson & Johnson has long been a well-performing blue chip stock, and is likely to continue to do so moving forward. With a forward PE ratio of 18.63 and a dividend yield of 2.60% that is likely to grow given the company’s history, JNJ offers solid value to income and value investors, as well as being attractive to momentum investors given its run of success.
Pfizer Inc. (PFE - Free Report)
Pfizer Inc. is a research-based, global pharmaceutical company that discovers, develops, manufactures, and markets medicines for humans and animals. The company’s diversified global healthcare portfolio includes human, biologic and small molecule medicines and vaccines, as well as nutritional products and healthcare products.
Pfizer too is a Zacks Rank #2 (Buy) stock currently, and offers investors good bang for their buck with a B Value Style Score. This Style Score can be attributed to a low PE ratio of 14.72, an earnings yield of 6.85%, and a cash to price ratio of 10.81. The company also offers a solid dividend yield of 3.32%, making it attractive as an income and value investment.
Shares of PFE are up more than 12% year-to-date, and could be poised to finish the year even higher thanks to its projected growth in sales and earnings. The company has current year projected sales growth of 7.74%, in addition to projected EPS growth of 11.57%. PFE’s current year earnings estimate has soared from recent analyst revision activity, jumping from $2.28 90 days ago to the current estimate of $2.45.
With a solid dividend yield, PFE offers income for investors and some protection against downside risk in the recent volatile market. The company has a positive growth outlook too, and its solid value provides investors with an interesting investment opportunity.
Bottom Line
Armed with a high Zacks Rank, investors should consider both stocks. Both offer a solid dividend payment, though PFE’s is higher, for those looking for income, and each stock has other positives behind it. JNJ is a strong performer thus far this year and has proven over a long period of time that is a stable, growing stock, both in regards to its share price and its dividend payment.
PFE is more of an income and value play for investors, with a higher dividend yield and lower PE ratio. Both stocks look strong at the moment, and it is really up to investors to choose between the two on which attributes they tend to look for when making their stock picks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>