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3 Reasons This Healthcare Stock Is A Great Buy In 2022


JThe importance of the healthcare industry has become clearer amid the pandemic. With the aging population and the world plagued by many other health crises, this is a sector that is not losing its relevance any time soon.

Everyone knows Johnson & Johnsonit’s (NYSE: JNJ) brands including Listerine, Neutrogena, Clean & Clear, Benadryl, and Stayfree, and many more that have captured global market share. But the company is much more than that. Even amid the ongoing pandemic, Johnson & Johnson has continued to grow revenue and profit, showing just how strong its brand is and the loyal customer base it has created.

Its recent results for the fourth quarter of 2021 testify to its excellent finances. Let’s take a look at those numbers and why this stock is a great buy this year.

Image source: Getty Images.

1. He has exceptional finances

For 2021, the company reported revenue of $94 billion, up 13.6% year-over-year, and adjusted net income increased 22% to $26 billion. dollars. With a portfolio of quality drugs, its pharmaceuticals segment generated 55% of total revenue last year, up 14% year-on-year.

Its medical devices segment, which offers a range of products (from those used for joint reconstruction and trauma to sports medicine and biomaterials), saw a year-over-year increase of 18% to reach $27 billion in 2021. The segment has recovered this year from the impacts of COVID-19, which had delayed all elective procedures.

Johnson & Johnson also plans to fight its peers Intuitive surgery in the segment of robot-assisted surgery. Intuitive has dominated the space with its state-of-the-art da Vinci robotic system, which is popular around the world. Johnson & Johnson introduced its Ottava robot-assisted surgery system in November 2021.

The company expects another solid year. In its forecast for the year 2022, J&J said that, including sales of its COVID-19 vaccine, it expects aoperating sales adjusted to grow by around 7% to 8.5% and aadjusted operating earnings per share should grow in the range of 8.2% to 10.2% to land between $10.60 and $10.80 per share.

Wall Street analysts also see Johnson & Johnson shares rising 14% over the next 12 months.

2. Its diversified activity is its strength

The competitive advantage of healthcare juggernaut Johnson & Johnson is its diversified business. It operates three segments: consumer healthcare, pharmaceuticals and medical devices. Recently, it announced that it would spin off its consumer segment into a new publicly traded company, but the remaining businesses have a lot of potential.

Some of its popular drugs from its pharmaceutical segment have shown strong results in the past year. That includes the immunological drug Stelara, whose sales jumped 18.5% year-over-year to $9.1 billion. And Tremfya, a treatment for adults with moderate to severe plaque psoriasis, saw an impressive 58% year-over-year increase to more than $2.1 billion in revenue for the year.

Cancer drugs Darzalex and Erleada also added $7.2 billion to total sales for the year. Darzalex, used to treat multiple myeloma, saw sales in the United States jump 42% year-over-year. U.S. sales of Erleada, which is used to treat prostate cancer, were up 39% from 2020 levels. The company’s neuromedicine Invega Sustenna, used to treat schizophrenia in adults, has brought in an additional $4 billion in revenue for the year.

The company also generated $2.3 billion in sales from its COVID-19 vaccine, Ad26.COV2.S, used to treat the SARS-CoV-2 virus.

3. He’s a dividend king

Johnson & Johnson is not just about growth. The company is also a dividend king, paying dividends for 59 years and prove that the company has a stable activity. The increase in profits allowed him to pay and increase dividends even in difficult markets. Currently, its dividend yield is 2.59%, better than the S&P500yield of 1.3%. The company recently announced its quarterly dividend payment of $1.06 for the first quarter of 2022, payable March 8.

J&J’s continued effort to develop innovative products is what leads me to believe in its growth prospects. It’s a smart healthcare choice for risk-averse investors who want some stability with their investments while earning consistent long-term dividends.

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Sushree Mohanty has no position in the stocks mentioned. The Motley Fool owns and recommends Intuitive Surgical. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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