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Linked here is a detailed quantitative analysis of Johnson & Johnson (JNJ). Below are some highlights from the above-linked analysis:

Company Description: Johnson & Johnson is a leader in the pharmaceutical, medical device, and consumer products industries.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

JNJ is trading at a premium to all four valuations above. Since JNJ's tangible book value is not meaningful, a Graham number can not be calculated. When also considering the NPV MMA Differential, the stock is trading at a 19.2% premium to its calculated fair value of $130.62. JNJ did not earn any Stars in this section.

Dividend Analytical Data: In this section, there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

JNJ earned one Star in this section for 2.) above. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45% The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 61 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

The NPV MMA Diff. of $361 is below the $500 target I look for in a stock that has increased dividends as long as JNJ has. If JNJ grows its dividend at 5.3% per year, it will take 5 years to equal an MMA yielding an estimated 20-year average rate of 3.75%.

Peers: The company's peer group includes: AbbVie Inc. (ABBV) with a 4.0% yield, Eli Lilly & Co. (LLY) with a 0.9% yield, and Bristol-Myers Squibb Company (BMY) with a 4.0% yield.

Conclusion: JNJ did not earn any Stars in the Fair Value section, earned one Star in the Dividend Analytical Data section, and did not earn any Stars in the Dividend Income vs. MMA section for a total of one Star. This quantitatively ranks JNJ as a 1-Star Very Weak stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $143.85 before JNJ's NPV MMA Differential increased to the $500 minimum that I look for in a stock with 61 years of consecutive dividend increases. At that price, the stock would yield 3.3%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $500 NPV MMA Differential, the calculated rate is 6.1%. This dividend growth rate is above the 5.3% used in this analysis, thus providing no margin of safety. JNJ has a risk rating of 1.50 which classifies it as a Low-risk stock.

JNJ is well-positioned in the Healthcare industry with a diverse revenue and an excellent research pipeline. The company's many competitive advantages include: products that are largely immune from economic cycles, minimal reliance on any single product category (or customer), substantial financial resources, and a significant global presence.

The company enjoys a position of low debt and strong cash flows. Currently, its free cash flow payout of 86% (up from 60%) is at my maximum and enjoys a low total debt to capital of 37% (up from 30%). The stock is currently trading above my calculated fair value of $130.62. I will not be adding to my position at this time.

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