How to Buy Johnson & Johnson (JNJ) Stock

Johnson & Johnson (NYSE: JNJ) is the largest pharmaceutical company in the world and the tenth-largest U.S. corporation by market capitalization at $376.62 billion. The pharmaceutical sector is one of the most profitable in both the U.S. and U.K. economies. 

Johnson & Johnson stock is the granddaddy of health care stocks, and after months of research and development, Johnson & Johnson (NYSE: JNJ) finally received emergency FDA approval of its vaccine on February 27, 2021. The emergency order covers distribution to individuals in the U.S. 18 years of age or older. The JNJ vaccine is 85% effective at preventing severe COVID-19 cases after 28 days post-vaccination. 

In a surprising turn of events, rival pharma company Merck (NYSE: MRK) has agreed to help in the production process. By the end of 2021, the company expects to manufacture 1 billion doses of its single-dose vaccine. 

How to Buy Johnson & Johnson Stock

You can buy Johnson & Johnson stock right now if you have a funded account with a reputable stock broker with access to trade stocks listed on the NYSE. If you plan to buy JNJ stock for dividend income and long term capital appreciation, you might want to consider buying your stock through a discount broker. While you might not get access to in-depth research and other extras offered at full-service brokers, you would pay a smaller commission.   

Keep in mind that how you buy Johnson & Johnson stock is just as important as where you trade, so make sure you pick the right broker.

Step 1: Pick a Broker

Your needs take priority when choosing a broker, so knowing what your needs are for a broker would make your choice easier. For example, if you have limited market experience and need educational resources and an easy to use trading platform, you might consider TD Ameritrade or E*TRADE. 

If you have a lot of trading experience and need an advanced trade execution platform, you would probably be more comfortable with a broker like Interactive Brokers, so just remember that some brokers will be able to meet your needs better than others.  Check out Benzinga’s guide on how to choose a broker for more information.

Step 2: Use Demo Accounts to Try Different Brokers’ Trading Platforms

Demo accounts are practice trading accounts that let you trade risk-free with virtual money. Widely offered by online brokers, these accounts can be opened to assess a broker’s trading platform and to practice trading.

You can also open more than one account with different brokers, so doing this would probably give you an idea of which broker best suits your needs and preferences when it comes to their trading platform.

Step 3: Fund a Trading Account

After you’ve familiarized yourself with a broker’s trading platform and feel comfortable with their service and commissions, you’re ready to fund an account. Many brokers let you open accounts free of charge, but if you want to buy JNJ stock, you’ll need to have money in a trading account before doing so. 

Make sure you check with your preferred broker on their requirements for opening an account, since each broker has their own initial deposit minimums and funding methods, although most brokers will take debit cards and bank transfers for deposits.

Step 4: Buy JNJ Stock

Once your account is funded, you might want to watch JNJ stock for a session to see how the stock trades and to pick the optimum buying price. You can then place a good til canceled (GTC) limit order at your preferred price level and for the amount of stock you wish to buy. You can also just buy the stock you want at the prevailing market price by putting in a market order.

Johnson & Johnson Stock and History

New Brunswick, New Jersey-based Johnson & Johnson was founded in 1886 by 3 brothers: Robert, James and Edward Johnson, who had been working in a medical products business and decided to go out on their own.

One of the company’s early innovations was the first commercial first-aid kit, introduced in 1888. The company began its expansion in the 1920s, opening offices in the U.K. and Canada and continued growing by purchasing other companies involved in health care products, such as Janssen Pharmaceuticals and Janssen Biotech, DePuy, Ethicon and Actelion.  

The company’s 3 major divisions include pharmaceutical, consumer and medical devices and diagnostics. The firm’s pharmaceutical division provides a wide array of medical products for the treatment of infections, as well as for other medical purposes, including contraception, oncology, neurology, immunology, hematology, dermatology, pain management and vaccines.

Johnson & Johnson’s consumer division sells products for oral care, skin care, baby care and nutritional care as well as over-the-counter medical products. The medical devices and diagnostics division provides orthopedic joint reconstruction, spinal care, surgical care, sports medicine and women’s health products. 

In 1944, Johnson & Johnson went public in an initial public offering (IPO) at $37.50 per share on the New York Stock Exchange (NYSE) under the symbol JNJ. After adjusting for splits and dividends, JNJ stock was trading under $1 per share in June of 1970 and by February of 1990, the stock had reached $6.70 per share. JNJ stock then increased to $52.40 by October of 1999.

JNJ stock then traded between $50 and $70 per share until December of 2012. The stock has since gained consistently after breaking out of that particular range and currently trades at $141.85 per share.

Future Outlook for JNJ

The future prospects for JNJ seem positive, supported by potential growth in healthcare innovation and expansion in its pharmaceutical sector. With a strong pipeline of new medications and ongoing research in fields such as oncology, immunology, and vaccines, JNJ is positioned to take advantage of advancements that address evolving healthcare demands.

Market trends show that more consumers are interested in personalized medicine and new therapies, which may affect the company's performance. JNJ's focus on creating advanced treatments aligns with these trends, improving its competitive position.

Recent reports indicate that strategic partnerships and positive clinical trial outcomes may lead to an increase in JNJ stock valuation. As the healthcare industry adapts in the post-pandemic era, the company appears well-positioned due to its established brand and diverse product offerings. In summary, JNJ's commitment to healthcare innovation and pharmaceutical advancement suggests it may be a promising investment option moving forward.

Why Should You Buy JNJ Stock?

Investing in stocks requires careful consideration of a company's stability and growth potential. Johnson & Johnson (JNJ) stands out in the healthcare sector. It offers a wide range of products, including pharmaceuticals, medical devices, and consumer health items. This diversity shows the company's resilience in a changing market. JNJ has a strong reputation for quality and innovation. Its solid financial performance and regular dividend payments make it attractive for both growth and income investors. In the following sections, we will examine JNJ’s financial health, market trends, and its competitive advantages.

Dividend Income

JNJ stock’s status as an S&P Dividend King makes the stock particularly attractive to investors who concentrate on dividend income and yield. The company is also the only one with a Dividend King ranking in the healthcare sector of the U.S. economy. 

Defensive in an Economic Downturn

JNJ stock can retain a good part of its value during economic downturns, making it a defensive investment, given the significant potential for future weakness in the U.S. economy. In addition, the company’s dividend yield, which increases as the stock’s price falls, would tend to create demand for the popular and top-rated stock, thereby usually mitigating its losses overall. 

EPS Growth

JNJ stock has seen its earnings per share (EPS) increase consistently over the last 10 years. While this trend could reverse, some analysts expect its EPS to continue to increase by 6% per year through 2024.

Considerations Before Buying JNJ Stock

Before investing in a company like Johnson & Johnson (JNJ), it’s important to consider several factors. JNJ is a large and diverse healthcare company. It offers products in pharmaceuticals, medical devices, and consumer health. Investors should look at recent financial performance and industry trends. Regulatory changes and the company’s market position are also key considerations. It’s essential to understand risks, such as product liability issues and changing market conditions. This analysis will help potential investors make informed decisions about JNJ stock.

Stock Market/ Economic Downturn

In a severe economic downturn, even defensive stocks like JNJ can lose some of their value. Worsening employment numbers and reduced expendable income can reduce demand for Johnson & Johnson’s products and services. This causes slowing revenue that would adversely impact the company’s earnings per share and, ultimately, its stock price and possibly its dividend payments. 

Stock Near Historical Highs

The all-time high for JNJ stock is $147.36 per share, which is only just over 4% higher than its current share price of $140.69 per share. The high price of JNJ shares reduces its dividend yield and the chances for future capital appreciation when investing in it.

Lawsuit Exposure

The number of lawsuits pending against Johnson & Johnson has grown over the years, and it exceeded 100,000 as of 2018. The lawsuits have been filed for many products made by the company.

It also includes defects in its medical devices, side effects in pharmaceuticals such as Risperdal, which accounts for over 18,500 lawsuits and more than 24,000 lawsuits for a vaginal pelvic mesh product that caused erosion, infection, recurring incontinence and urinary problems in women.

As a further example of the risk involved, in July 2018, the company was required to pay 22 women and their families $4.69 billion in claims due to the presence of carcinogenic asbestos in Johnson & Johnson’s talcum powder that they believe led to their development of ovarian cancer.

Payouts for multiple lawsuits like this could adversely affect earnings, dividends, and eventually, JNJ’s stock price. 

Is JNJ Stock Right for You?

When assessing the suitability of Johnson & Johnson (JNJ) stock as an investment, various factors should be considered, particularly in light of the "Buy" rating given by 8 analysts. Individual financial objectives are important; conservative investors looking for reliable income may find JNJ's solid dividend history aligns with their strategy. On the other hand, growth-focused investors may be more interested in capital appreciation, which JNJ supports through its diverse product offerings and continuous innovation.

Risk tolerance is an important factor to consider. JNJ, as a large and established company, typically has lower volatility than smaller biotech firms. Nonetheless, potential investors should take into account sector-specific risks, such as regulatory challenges or market competition.

Current market conditions can affect decision-making. Economic factors like inflation or changes in healthcare policies may influence JNJ's performance, so it's important to consider these factors along with analysts' recommendations. Ultimately, determining if JNJ stock suits you will depend on your individual investment profile and the overall economic environment.

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