Is JNJ a high-quality business?

AlphaMadera's AlphaQuality grade scores Johnson & Johnson on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how JNJ compares to a Buffett-style quality bar.

What is Johnson & Johnson's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to JNJ based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes JNJ a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

JNJ - Johnson & Johnson

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $250.58 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

B+ 79.5 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

B- 68.6

5yr Avg ROIC 13.4% 75/100
Operating Margin Trend -0.02 pp/yr 54/100

Capital Efficiency

Weight: 15%

A+ 96.6

5yr Avg ROE 28.2% 100/100
5yr Share-Count CAGR -2.4% 90/100

Growth Quality

Weight: 15%

B- 67.2

5yr Revenue CAGR 4.6% 57/100
5yr EPS CAGR 9.0% 73/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

A 91.9

5yr FCF Margin 22.3% 92/100
5yr FCF/NI Conversion 0.91x 91/100

Balance Sheet

Weight: 20%

A+ 94.6

Net Debt / EBITDA 0.68x 88/100
Interest Coverage (EBIT/Int) 34.55x 100/100
Altman Z-Score 4.92 100/100

Stability

Weight: 15%

C 56.6

EPS Volatility (σ/μ) 0.51 30/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 1/5 80/100

5 of 5 gurus held; 1 new buy; 1 added; 3 trimmed; 1 full exit.

Holders: 5 +1
Avg Δ position: -25.6%
New buys: 1
Full exits: 1

Soros new
Laffont sold -100%
Wood decreased -73%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.