|Johnson & Johnson Goes Nowhere |
The company has $14 billion in the bank and only $2 billion in debt, along with an amazing return on equity of 30%. It trades for 11 times cash flow. Intel Capital, which allocates Intel's ( INTC) spare billions, owns Johnson & Johnson. Another owner of the company is Islamic-compliant fund Amana Income, as is Warren Buffett, who tends to own a lot of these dividend aristocrats. Take a look at Johnson & Johnson's Stockpickr page. David Blitzer, managing director and chairman of the index committee at Standard & Poor's, has said that "since 1926, dividends have contributed nearly a third of the market's total equity returns." I'm sure many of the investors I've mentioned here believe that if you can get that third and do it by buying companies that are both cheap (as a multiple of cash flows) and growing, then it's quite likely you will outperform the market.