One of the biggest problems for healthcare firm Johnson & Johnson (NYSE:JNJ) in the last decade or so has been talc. This powder, which many swore by until a potential link between it and some cancers was discovered, has brought in huge sums for the company while dooming it to a series of lawsuits. In fact, Johnson & Johnson added modestly in Friday afternoon’s trading thanks to a win in a Florida court case on that very topic.
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The latest case handed down the verdict that talc-based baby powder did not, in fact, cause cancer in a woman. The case was filed by the family of a woman from Sarasota County, Patricia Matthey, who died in 2019 after being a daily user of Johnson & Johnson’s talcum powder. Matthey was ultimately diagnosed with ovarian cancer in August 2016.
The jury found that the cancer was not generated by the use of talcum powder, and Johnson & Johnson’s worldwide vice president of litigation, Erik Haas, approved of this wholeheartedly. Haas noted, “Consistent with decades of scientific research, the jury appropriately found that talc is safe, does not contain asbestos, and does not cause cancer, which is the same outcome the company achieved in 16 of 17 ovarian cases tried to date.”
A Changing Playing Field
Meanwhile, the latest word out of the company’s earnings report revealed that the field is changing somewhat. Its sales of medical devices were on the decline, but it was seeing substantial gains in its cancer drugs. Its Stelara psoriasis drug is on the decline as well, but reports noted there was a bright spot in the Abiomed heart pump segment and in wound closure devices. However, Stelara’s sales were said to be down somewhat thanks to an upcoming loss of exclusivity that would change its position with healthcare providers.
Is JNJ a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on JNJ stock based on six Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 7.13% loss in its share price over the past year, the average JNJ price target of $179.17 per share implies 21.42% upside potential.
JNJ also pays out a quarterly dividend, which yields 3.12%. This is above the healthcare sector (XLV) average of 1.49%.
Is JNJ the Right Stock to Buy for Passive Income?
Before you hurry to invest in JNJ, think about the following:
TipRanks’ team has built a Smart Dividend Stock Portfolio for investors, and Johnson & Johnson is not included. Our portfolio highlights companies that have been hand-picked for their potential to deliver significant passive income for years to come.
