Drop Johnson & Johnson, Pick These Steady Eddie Stocks?
- DaVita and Duke Energy have shown higher revenue and operating profit growth than Johnson & Johnson over the last year.
- DaVita's stock is significantly cheaper than Johnson & Johnson's, with better growth metrics.
- Investing in DaVita and Duke Energy is recommended due to their stronger performance and lower valuations.
Recent analysis indicates that DaVita and Duke Energy are currently more appealing investment options compared to Johnson & Johnson. Over the past year and the most recent quarter, both DaVita and Duke Energy have demonstrated superior growth in revenue and operating profits. Specifically, DaVita's stock is priced at $7.76 per dollar of earnings before interest and taxes, significantly lower than Johnson & Johnson's $16.63, while also showing higher annual and quarterly growth rates. Despite Johnson & Johnson's operating margin improvement from 23.9% in 2020 to 27.5% in 2023, it has lagged behind DaVita and Duke Energy in terms of revenue growth. DaVita has experienced the strongest revenue growth among the three companies, while Johnson & Johnson has shown the slowest growth during the same period. This trend suggests a potential shift in market rewards favoring DaVita and Duke Energy. Duke Energy, known for its regulated utility operations, provides a stable cash flow and is considered a safe investment during economic downturns. On the other hand, DaVita is a leader in the expanding dialysis market, driven by an aging population and increasing rates of chronic kidney disease. This growing demand for kidney care services positions DaVita favorably in the healthcare sector. Overall, the analysis highlights the advantages of investing in DaVita and Duke Energy over Johnson & Johnson, as they offer better growth prospects and lower valuations, making them attractive options for investors seeking steady returns.