NEW YORK (TheStreet)) -- Despite concerns about organic growth, and what many pundits consider to be "diminishing productive balance" within its various business segments, Johnson & Johnson (JNJ), whose stock is up close to 40% year to date, remains a top-notch player in Big Pharma. Just in case you were wondering.
I won't deny the fact that Johnson & Johnson's drug business continues to do most of the pulling, but I am -- nonetheless -- impressed by the meaningful improvements management has made in areas like orthopedics and medical devices.
That said, with the stock having already secured such healthy gains, these shares, which now carry a price-to-earnings ratio that is more than twice that of Pfizer (PFE), are not cheap. However, if JNJ's recent earnings report serves as any indication, I wouldn't be in a rush to sell either.The company delivered third-quarter revenue of $17.58 billion, which exceeded Street estimates of $17.46 billion. As has been the case for most of the year, the company's better-than-expected revenue performance, up roughly 3% year over year, was again led again by its strong drug business, which grew 11%. Leading the way was Johnson & Johnson's best-seller Zytiga, which surged more than 70% year over year. As evident by the 30% sequential growth, it's beginning to look as if management has found a winner in Xarelto. This is JNJ's blood thinner that has begun to threaten Bristol-Myers Squibb's (BMY) top-selling alternative Eliquis. Not to be outdone, Johnson & Johnson immunology and oncology drug, which was up 13% and have proven very effective among cancer patients, gives the company advantage over Merck and Sanofi (SNY), especially given the inroads JNJ has made in cancer, and now with type-2 diabetes drug Invokana.
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