What Rate of Return Will an Investment in Johnson & Johnson Deliver? Part 2

Follow-up Examples From Part 1

In part 1 of this two-part series I covered two additional companies.  Therefore, in this part 2 I wanted to give the reader the opportunity to run their own calculations regarding the future return potential of Consolidated Edison Inc. (NYSE:ED) and Cisco Systems, Inc. (NASDAQ:CSCO). However, I will spare the reader from repeating the exercise as I did with Johnson & Johnson above.  Instead, below I have provided links to live fully functioning F.A.S.T. Graphs™ on both of these companies.  Additionally, I have provided a few screenshots just to get you started – you choose to take the opportunity to follow the links and run your own calculations.

Consolidated Edison Inc. (NYSE:ED) 

Here is the link for a FAST and FUN Preview of F.A.S.T Graphs using the stock symbol ED

Cisco Systems, Inc. (NASDAQ:CSCO)

Here is the link for a FAST and FUN Preview of our F.A.S.T Graphs using the stock symbol CSCO

Summary and Conclusions

As I stated in part 1 of this two-part series, common stocks come in all sizes and shapes. There are certain companies that might be attractive based on their dividend yields.  Other companies might be attractive based on their future growth potential. And, of course, there is everything in between.  This simply implies that different types of companies are capable of producing significantly different future rates of return. The primary drivers will be the growth potential of each business, coupled with the valuation you paid to purchase those results.

The key to success is to identify the types of companies you are comfortable investing in, and that are capable of meeting your own goals and objectives.  However, I believe that no matter how much you like the company, you should always be keenly aware of the valuation you are being asked to pay.  One of the best ways to implement and apply a disciplined approach to investing is to run the numbers out to their logical conclusions.

With this article, I utilized the “Forecasting Calculators” provided by the F.A.S.T. Graphs™research tool.  However, the same process could be applied utilizing a simple spreadsheet.  Earnings estimates are available from many sources, and there is never a substitute for conducting your own comprehensive research and due diligence.  My key message with this article is to always invest with your eyes wide open.

Disclosure: Long JNJ,ED,CSCO

Note: This article is written by Chuck Carnevale and was originally published at FASTgraphs.com.

Additional Links

(1) http://files.shareholder.com/downloads/JNJ/2950305652x0x900070/DA0EFEC9-5B1F-47DF-8794-4C92B65389C1/JNJ_Earnings_Presentation_2Q2016.pdf