Fool Fight: Johnson & Johnson vs. Procter & Gamble

Welcome to another Fool Fight. Grab your ringside seat, please.

Our last bout, which featured Oracle and Red Hat, resulted in a unanimous decision for the database demon thanks to several passionate Motley Fool CAPS players. Today, our tussle takes us to the labs of two consumer products titans.

Tale of the tape
Let's meet our combatants. In the red corner, it's Johnson & Johnson (NYSE:JNJ), which gets raves by playing Santa for charities in need. Nevertheless, growth once again slowed during the third quarter, giving rise to yet another acquisition. This time, J&J acquired ConorMedsystems (NASDAQ:CONR) for $1.4 billion in cash. Fools can't seem to decide whether this and other deals like it are good or bad or whether J&J deserves mention as one of the best blue chips for 2007.

Meanwhile, in the blue corner, it's Procter & Gamble (NYSE:PG), which had a peachy first quarter highlighted by 27% sales growth thanks to the firm's $57 billion acquisition of Gillette. Management believes that innovation and enhanced productivity will lead to still greater gains. Maybe P&G should be the best blue chip?

Get ready to ruuuuummmmmmble!
Let's find out. Ding! There's the bell! First out of the corner is Procter & Gamble with a series of jabs from CAPS all-star ari21:

"P&G is creating new products every year. New markets in China, Asia, and Brazil. It has become an international consumer [products] company. Even in a depressed economy you need to use soap, clean your house, and take care of your family and you [do that] with P&G products. You need to buy those products again and again and again."

Johnson & Johnson retreats to its corner and then sets up a counter, which is delivered to P&G's jaw courtesy of Foolish analyst Andy Cross, who goes by TMFOpie in these parts:

"With 3 significantly large pharma-medical-consumer businesses, JNJ is one of the most respected and well-run businesses in the world.... With [returns on equity] consistently near 30%, [return on assets] around 15%, and a AAA credit rating, JNJ has it going on."

Stunned, P&G is forced to cover up. But as J&J presses the assault, CAPS all-star esxokm goes for the body:

"Like one of my other picks -- Clorox (NYSE:CLX) -- this one is a long-term keeper. Its portfolio of brands is stunning and does a lot of volume every year. This stock is a core investment, to be sure -- dollar-cost average it, and plow all dividend payouts back in. It has great cash-flow characteristics behind it, the company knows how to develop household products and foodstuffs that resonate with consumers, and it is a reliable Dow component. Check it out."

Battered and bruised, J&J unleashes one final assault courtesy of fellow Fool Rex Moore, who goes by TMFOrangeblood:

"Buy world-class consumer goods companies, reinvest the dividends, and then wait 30 years. Sounds boring, but that's a simplified version of Jeremy Siegel's advice for long-term wealth. J&J is among the best of the best, and will anchor my portfolio for decades."

Let's go to the scorecard
Not surprisingly, Rex said exactly the same about P&G. As the bell rings, the judges are split. Agonizing minutes pass before a decision finally comes. It's 2-1 in favor of P&G, whose razor-thin margin in bullish sentiment is enough to get the win:

Get in the ring!
Like Creed vs. Balboa, this one begs for a rematch. But that will only happen when you -- yes, you! -- get in the game and throw a few jabs on behalf of the stock you favor. What are you waiting for? It's entirely free to participate in CAPS. Join now. Your Fool cap awaits.

Bite the bear by getting paid to invest. The Motley Fool Income Investor portfolio, of which Johnson & Johnson is a member, yields more than 4% as of this writing and is up by more than 8% on the S&P 500 since inception.Click here nowto get 30 days of free access to the service.

Fool contributor Tim Beyers, ranked 1,400 out of more than 18,600 in CAPS, has 30 picks in his CAPS portfolio, including Oracle, in which he also owns shares. Get the skinny on all of Tim's stock holdings by checking his Fool profile. The Motley Fool's disclosure policy is always in fighting shape.