$85 Billion Cash Return: Can JNJ Keep Its Payout Machine Running?

Johnson & Johnson's (JNJ) stock has risen 57% over the last year, but what did its owners actually gain from this performance? According to Trefis, JNJ returned $84.7 billion in dividends and buybacks over the past five years, which is equal to 13.0% of the company's entire market value of $652.9 billion.

This cash return requires a robust cash engine, which Johnson & Johnson has built on high-margin products that generate immense free cash flow. The Innovative Medicine division is the core of this machine, fueled by blockbuster drugs such as DARZALEX and TREMFYA, which have delivered 18% and 71% sales growth respectively.

Despite the company's ability to return a fortune to its shareholders, JNJ's stock has only matched the broader market over the last five years. This raises questions about why investors would choose Johnson & Johnson over other growth-oriented stocks, especially given the potential risks associated with its MedTech division.