Johnson & Johnson Dividends: The Spring Back Effect

In January 2003, Johnson & Johnson shareholders collected $0.92 per share in dividends while the stock traded at $57 per share. That was a yield of 1.61%. The P/E ratio of the stock was in the mid-20s, suggesting that Johnson & Johnson shareholders needed double-digit earnings growth otherwise there would be enough P/E compression to bring period of mediocre returns.

The latter happened. From 2003 through 2011, Johnson & Johnson had to work off the effects of high valuation, work through the 2008-2009 recession just like every other company, and deal with the effects of manufacturing recalls in the 2010-2011 years coming out of the recession.

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GlaxoSmithKline Stock: A Fifteen Year Review

I like GlaxoSmithKline (GSK) much more than the stock’s fifteen-year track record of earnings and stock price changes would suggest that I should. I scanned a page of my overview notes for GlaxoSmithKline and attached a page to the bottom of this post.

The quick metrics for GlaxoSmithKline aren’t pretty. From 2000 through the first quarter of 2016, the price of the stock has declined from $47 to $43 per share. That negligible change in share price makes sense, because the profits per share generated by a GlaxoSmithKline investment generally remained stagnant. Glaxo earned $2.08 per share in profits back in 2000, and it earns an estimated $2.04 per share now.

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