J&J: A Winner on Both Sides of the Ball (Fool TV)

In football parlance, they say offense wins games, but defense wins championships. Well, according to Fool analyst Nick Kapur, the same goes for stocks. And if you're looking to build a dynasty in your portfolio, you'd be hard-pressed to find a better-balanced outfit than veteran Johnson & Johnson (NYSE: JNJ  ) .

Let’s start on defense: J&J is huge, tipping the scales with an approximately $175 billion market cap. It markets some of the world's most beloved and ubiquitous consumer brands, from Band-Aid to Tylenol to good ol' Johnson's Baby Oil. It operates all over the world, and its diverse revenue streams make it virtually impervious to currency risk. The company boasts huge cash flows, and its hard-charging management team makes certain it spins off a steady yield of 3.5%. Talk about defense.

Want to see some more points on the board? This 124-year-old American company is still growing after all this time, pushing downfield in emerging markets such as China, India, and Brazil -- and penetrating quickly wherever it goes. Sound like a world champion? Nick Kapur is betting on it. And with Johnson & Johnson currently trading around 12 times free cash flow, he thinks this is a perfect time to get in the game. 

For more from Fool TV:

Nick Kapur owns shares of J&J, which is an Income Investor recommendation. Motley Fool Options has recommended a buy calls position on J&J. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (12)

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  • Report this Comment On May 12, 2010, at 7:21 PM, ds10 wrote:

    If JNJ is heading for the Championship, it is doing it with a slow running game!

    Bought it exactly 4 years ago at 60. Today it almost made 65.

  • Report this Comment On May 12, 2010, at 10:36 PM, TheDumbMoney wrote:

    ds10, being up 8 or 9% on JNJ is vastly superior to what most people acheived based on stocks they bought 4 years ago, and for very good reasons. One can expect JNJ to "underperform" in a frothy nonsense bull market, and expect it to outperform in a down market, and expect it to outperform in the long term.

  • Report this Comment On May 13, 2010, at 3:17 PM, jim7holton wrote:

    dumberthanafool is right on. JNJ is an income stock that will grow slowly over the long period--3.5% yield is nothing to sneeze at on a quarterly basis. As an old fool I take some chances, but I look at the time frames as best as I am able--sometimes that is not very insightful. My point, in addition, is for Jeff Fischer to consider pulling a percentage of our earnings at the end of a period in place of the usual up front charges like a doctor or lawyer. The basic fees eliminate a large group of people that do not have the uninvested capital--just a thought.

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