How Did Johnson & Johnson Start?

Johnson & Johnson (NYSE:JNJ) is one of the largest and oldest corporations in the United States, and it’s a major player in the global pharmaceutical, medical device, and consumer healthcare industries. Headquartered in New Brunswick, New Jersey, this massive enterprise includes about 250 subsidiaries across 175 countries.

In 2020 alone, Johnson & Johnson generated $82.6 billion in sales and became a major player in the global coronavirus response. The company invested over $1 billion to develop and distribute its vaccine candidate, and that investment should sustain profits for years to come through booster shots.

But this is nowhere near the first global event this century-old company weathered on its way to becoming a $475 billion company juggernaut. In fact, it’s been a trusted consumer brand for generations, and it all started with humble beginnings.

When Did Johnson and Johnson Begin?

Johnson & Johnson (JNJ) was founded by three brothers – Robert Wood, James Wood, and Edward Mead Johnson – in 1886. The company started by manufacturing sterile surgical supplies, medical plasters, and household products, along with medical guides used as an early form of content marketing.

The familiar logo is a replica of James’s signature, while Robert served as the company’s first president.

It distributed its medical manuals to 85,000 doctors and pharmacists around the country, while supporting railroad construction workers with the first commercial first aid kit. The company’s focus on research and development ensured the company remained on the cutting edge of medical technology through two world wars.

It even vaccinated its employees during pandemics and epidemics like the smallpox and flu.

By 1943, the company held its initial public offering (IPO) and started trading on the stock market. It started paying a dividend in 1972 and hasn’t missed a single quarterly payment since. Its annual payout per share rose to over $4.00 in 2021 after paying $0.009315 in its first year.

This has landed it on the Dividend Aristocrats list.

Why Is It Called Johnson and Johnson?

The company is named after the Johnson brothers, and the reason it’s not Johnson & Johnson & Johnson is because Robert is not named in it. Instead, it’s named after his two brothers. This is because he was still a partner in Seabury & Johnson, a company he started with George Seabury a decade earlier.

Johnson & Johnson inevitably bought the company by 1933, but it was already well established with just the two names as its brand. However, it did end up with only two brothers running it over time, although it was two different brothers than the name originally implied.

In fact, Edward Mead Johnson launched a separate company called Mead Johnson & Company in 1905. That company still exists today and is owned by a separate company unassociated with Johnson & Johnson. 

With a combined net worth of over $10.7 billion, the Johnson family is the 32nd wealthiest family in the U.S., according to Forbes. But there’s a long road from its humble beginnings to this multi-generational wealth.

How Johnson & Johnson Became a Household Name

Robert Wood Johnson’s son, Robert Wood Johnson II, took over the family business in 1932 and is largely credited with transforming the company into a global brand. He was a firm believer in worker rights who lobbied President Roosevelt to increase wages and reduce work hours during The Great Depression.

This would soon form the company’s credo, which guides it to this day. It focused on employee and customer wellbeing instead of profits. 

As the company grew revenues, it used its vast fortune to buy other companies, and these acquisitions fueled its continuous growth over the decades. It still uses this strategy in modern times; it spent $6.5 billion on Momenta Pharmaceuticals in August 2020.

The foundation of the company’s successful branding can be attributed to marketing. As an early proponent of content marketing, it set the standards for health and personal care for generations. Many people depend on their brands, even if they don’t realize they own them.

What Brands Does Johnson and Johnson Own?

Now a multinational conglomerate, Johnson & Johnson owns a lot of brands. This includes Benadryl, Band-Aid, Bengay, Acuvue, Listerine, Neutrogena, Clean & Clear, and Lactaid. Of course, these are just its consumer-facing brands. It also has a broad pipeline of pharmaceuticals and medical devices.

These have sparked growth to the tune of $82.584 billion in annual revenue in 2020 and $14.71 billion in net income.

Of course, top line sales growth can also be attributed to the COVID-19 pandemic, which sparked the search for a vaccine. Johnson & Johnson has a prominent coronavirus treatment that was pivotal in containing this viral infection.

Is the Johnson and Johnson Vaccine Safe?

Johnson & Johnson’s Janssen subsidiary developed a COVID-19 vaccine that was designated as safe and effective through three stages of clinical trials with the FDA and CDC. Initially assumed to be a one-time shot, we now know other mRNA treatments wear off faster.

This means J&J’s vaccine is not yet recommended for a booster shot, while Moderna (MRNA) and others require them. It’s also believed to be more effective against the Delta variant. Still, vaccines represent only one revenue stream, and J&J stock’s future depends on much more.

What Is the Future of Johnson and Johnson Stock?

JNJ stock is at an all-time high and worth well over $450 billion, which corresponds to about 27 times 12-month trailing earnings. While the coronavirus vaccine is important, the company still has a solid R&D pipeline and core operations that weren’t slowed by this pandemic nor any other.

And it’s a great dividend stock that should continue its half century plus streak. Bullish investors believe it still has plenty of room to grow, and its focus on improving the lives of both customers and employees keep it running efficiently.

This is a relatively safe and stable investment to consider if you’re a fan of pharmaceutical stocks or need one to diversity your portfolio. It all started well over a century ago, and the credo developed in the early 20th century is still being used today.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.