J&J Q3 - slow and steady

Johnson & Johnson is always the first Vestact stock to release earnings for the season. Not exactly the most exciting business but sometimes a bit of boring in a portfolio is a good thing. This quarter saw a solid beat on sales and earnings, but they lowered full-year guidance slightly. That didn't seem to deter the market, the stock ended up 1.5% on a day when most other shares were down.

J&J now has two divisions: Pharma, which makes up 65% of sales and Medtech, which brings in the rest. It is like owning Amgen and Stryker simultaneously.

Blockbuster drugs like Darzalax (cancer), Invega Sustenna (schizophrenia) and Stelara (Crohn's disease) all did very well and were responsible for the solid sales beat. Darzalax alone brought in $3 billion. The medtech division missed estimates slightly but still managed to grow 6% year on year.

The share trades at 16 times earnings and a dividend yield of over 3%. It's a steady-as-you-go, defensive business with solid fundamentals. Despite the stock underperforming some of our highfliers, we still think you should hold this one in your portfolio.