Johnson & Johnson (JNJ) a High-Dividend, Value-Like Stock

February 2, 2016

johnson-and-johnson

Johnson & Johnson

Portfolio Manager Matthew Krajna of Nottingham Advisors says his firm favors the health care sector because of stocks like Johnson & Johnson (JNJ) that offer attractive valuations.

Matthew Krajna

Matthew Krajna

We find health care valuations relatively attractive, but we also see earnings per share growth in health care being higher than the S&P 500 for the coming year. And we think that stocks like Johnson & Johnson, which is the largest holding within the XLV ETF, offer interesting and compelling risk/return outlooks when taken as a whole.

Johnson & Johnson can be viewed as a company that typically offers value-like characteristics. That’s the interesting thing about health care as a sector, as it is this quasi-growth, quasi-value-type sector that has a component of biotech stocks that make up between 15% and 20% of the ETF but also has another slug of traditional value-type names such as Johnson & Johnson that pay higher dividend yields and offer more attractive valuations than the overall market.