Stock-In-Trade
Baby, Oh Baby!

Imagine you're on a game show for new parents called "Wheel of Diapers." You and your honey have to name as many health and beauty products in your home as you can in 60 seconds. The couple with the most items gets an au pair for a year. You're not sure if this is a good prize or not, but decide to go for it anyway.

You start listing products: that cute gold baby shampoo; Band-Aid adhesive bandages; your two Reach toothbrushes; the yummy smelling baby powder; Monistat-7; Neutrogena soap and moisturizer; Stayfree mini pads; Acuvue disposable contact lenses; Pediacare children's cough medicine; and Tylenol for babies. You then hastily remember your little brother's Retin-A acne medicine he left last weekend and your new Ortho-Novum birth control pills you now take religiously.

In other words, you single handedly keep Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> profitable. (And if you had named Mylanta, Pepcid AC, and Nicotrol, you'd be naming products produced by JNJ with help from Merck.)

If this sounds like the contents of your medicine cabinet, you're not alone. Like most families in America, you are probably a dyed-in-the-wool Johnson & Johnson consumer.

But Johnson & Johnson doesn't just count on Americans to buy its products. In fact, over half of its revenues came from overseas consumers in over 175 countries. Last week JNJ announced fourth quarter and year-end earnings for fiscal year 1997. For the year, net income rose 14% to $3.3 billion, or $2.47 a share (exactly as the Street had expected), up from $2.9 billion, or $2.17 per share, in 1996. In 1997, worldwide sales rose 4.7% in dollar terms to $22.63 billion, but the increase was even higher in local currency terms.

Johnson & Johnson has approximately 90,500 employees who work in 170 operating companies in 51 countries. The company has 64 consecutive years of sales increases; 35 consecutive years of dividend increases; and 53 continuous years of dividend payments. Currently there are 22 Wall Street analysts covering JNJ with a consensus rating of "outperform."

If you like to put your stock portfolio where your household budget is, don't forget to check out the Johnson & Johnson web page for the latest info on what's cooking in their lab that will soon be in your bathroom. And then come back here and talk to other Fools on our Johnson & Johnson message board and about other biotech and healthcare companies on our boards.