In today's first-round matchup of The Motley Fool Better Buy Tournament, Johnson & Johnson (NYSE:JNJ) squares off against Amazon.com (NASDAQ:AMZN) in a battle to determine which stock is the better buy now. The 64-company tournament pits two Motley Fool analysts against each other as they make the case for their stocks, with the winner determined by you, the readers.
Johnson & Johnson is the big, diversified player of the pharma space, but that doesn't make it a sleepy conglomerate, argues Motley Fool analyst David Williamson. Its pharmaceutical division is cranking out consistent double-digit growth rates thanks to strong products like Zytiga in prostate cancer and megablockbuster Remicade, and the success continues with recent approval for Imbruvica, a blood cancer drug with expected peak sales in the $6 billion-$7 billion range. Its medical device business is set for growth following the massive Synthes acquisition, and J&J is wisely selling off lower-margin diagnostics. This is a steady stock with a strong dividend, but a pharma division firing on all cylinders provides meaningful upside for investors.
To say that Amazon.com has led the e-commerce revolution would be an understatement. It practically penned the history books for the world of retail as we now know it. With 237 million active users compared to "only" what the company calls "tens of millions" of Amazon Prime subscribers, the company's continued growth potential is undeniable. Whether its strong network effect or domineeringly low-cost operation serves as its main advantage, Amazon now has the clout to adjust prices. Despite what looks like a stretched valuation, Motley Fool analyst Michael Finarelli believes bigger profits will come, and shareholders should continue to be rewarded.
Watch these analysts square off in the video below, then vote for a winner. Then check out the other companies in the Motley Fool Better Buy Bracket.
This year's winning stock?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
Cast your vote in the poll below the video!