Is This Dividend King Stock a Buy After a Major Development?

Core Viewpoint - Johnson & Johnson is navigating tariff challenges by negotiating price reductions in exchange for tariff exemptions, which could enhance sales volume despite lower prices [3][4][5]. Group 1: Financial Performance - Johnson & Johnson reported a net income of over $14 billion as of 2024, with a revenue increase of 6.8% year over year to $24 billion in the third quarter [5][7]. - The adjusted earnings per share for the company reached $2.8, reflecting a 15.7% increase compared to the previous year [7]. - The company has a market capitalization of $526 billion, with a gross margin of 68.27% and a dividend yield of 2.36% [7]. Group 2: Tariff and Manufacturing Strategy - Johnson & Johnson has 64 manufacturing facilities, with 41 located outside the U.S., making it susceptible to tariff impacts [4]. - The company estimated $400 million in tariff-related costs for fiscal year 2025 prior to recent developments [4]. - The tariff exemption deal allows Johnson & Johnson to avoid higher costs from import duties while potentially increasing sales volume [3][5]. Group 3: Product Portfolio and Innovation - The company has a diversified product portfolio, including cancer drugs like Darzalex and Erleada, and immunosuppressant Tremfya, which have compensated for the loss of patent exclusivity for Stelara [7][8]. - Johnson & Johnson has a robust product pipeline with new approvals such as Imaavy for generalized myasthenia gravis and Akeega for prostate cancer [9]. - The company is also developing the Ottava system within its medtech division to enter the robotic surgery market [10]. Group 4: Long-term Outlook - Johnson & Johnson is considered a strong buy-and-hold option, particularly for dividend investors, as it is a Dividend King with over 50 consecutive years of payout increases [11]. - The aging global population presents long-term growth opportunities for the company, as seniors require more medical care and pharmaceutical products [10].