Johnson & Johnson Stock Capital Return Hits $157 Bil

In the last decade, Johnson & Johnson (JNJ) stock has returned an impressive $157 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.

As it turns out, JNJ stock has returned the 9th highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Single stock can be risky, but there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 105% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for JNJ. (see Buy or Sell Johnson & Johnson Stock for more details)

Johnson & Johnson Fundamentals

• Revenue Growth: 4.7% LTM and 4.0% last 3-year average.
• Cash Generation: Nearly 18.1% free cash flow margin and 24.5% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for JNJ was 2.2%.
• Valuation: Johnson & Johnson stock trades at a P/E multiple of 20.6
• Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and better margins

*LTM: Last Twelve Months

That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.

JNJ Historical Risk

That said, JNJ isn’t immune to big drops. It fell about 35% in both the Dot-Com Bubble and Global Financial Crisis. During the Covid sell-off, it still lost nearly 27%. The 2018 correction and inflation shock dragged it down around 18-19%. So, even with its strong fundamentals, JNJ can take a hit when the market turns. Quality matters, but sharp downturns don’t spare many stocks.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.