At $104, J&J shares are up nearly 14% in year-to-date gains. So there's very little to complain about -- especially since the stock is outperforming the health care sector's 11% gain, according to Morningstar.
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Still, there are plenty of investors calling for Johnson & Johnson to break itself up into smaller pieces, even though the company is posting 9% year-over-year revenue growth. By contrast, rivals Covidien (COV) and Novartis (NVS) , which are smaller, are posting growth of 4% and 3%, respectively.
The way I see it, given Johnson & Johnson's roughly $300 billion market cap, investors should be happy. Not only is Johnson & Johnson outperforming beating equal-sized rivals like Merck (MRK) and Novartis in gross margin, the company is also growing the top line quicker than smaller players like Covidien and Pfizer (PFE) .
What's more, Johnson & Johnson stock is trading at a price-to-earnings ratio of 19. That P/E is five points lower than the industry average, according to Yahoo! Finance. With Johnson and Johnson's revenue growth having more than doubled those of Covidien and Novartis, it makes no sense for either company to command P/Es of 25 and 23, respectively.
Why break up the company when Johnson & Johnson is delivering more revenue growth and higher margins? It makes no sense. By that standard alone, the shares, which are trading at just 16 times 2015 estimates, according to Yahoo! Finance, makes Johnson & Johnson is one of the best bargains in Big Pharma.