Johnson & Johnson (NYSE: JNJ), the drug and consumer product maker, is a classic blue chip that all should all have in their portfolio,
That is shown in that more than two-thirds of the stock is owned by institutional investors such as mutual funds, pensions groups, and others.
It is always a bullish when institutional investors buy the stock of a publicly traded corporation. Pensions groups, mutual funds, and other institutional investors have massive resources, such as research departments. Those facilitate profitable investing in the stock market, and other asset classes.
There are many reasons why Johnson & Johnson is so widely held by institutional investors.
Based in New Jersey, Johnson & Johnson operates across the world in a wide range of health care goods and services. These range from easily recognizable consumer products such as baby shampoo to sophisticated medical devices. Johnson & Johnson allows its investors to profit from the burgeoning global demand for medical and health products and services.
It does this in a very profitable way, too.
The profit margin for Johnson & Johnson is close to 30 percent. That is about three times higher than the average for a member of the Standard & Poor’s 500 Index (NYSE: SPY). While a high profit margin is not everything for an entity, one that robust for a company the stature of Johnson & Johnson is very impressive, indeed.
This has been rewarded by the stock market.
Johnson & Johnson is up for the last month, quarter, six months, and year of market action (chart below). It is up nearly 20 percent for 2014. The bull market has been very, very good to Johnson & Johnson.
And Johnson & Johnson has been very good to its shareholders, too.
Its total return is enhanced by the dividend yield of just over 2.6 percent. That is much higher than the average of around 2 percent for a member of the Standard & Poor’s 500 Index, making it appealing to income investors. For long term investors seeking a robust total return, Johnson & Johnson is a very healthy choice!