Johnson & Johnson: Questionable Reputation. A Case for Avoiding Its Products.
Johnson & Johnson (JNJ), the iconic U.S. healthcare giant known for its focus on pharmaceuticals and medical devices, is currently grappling with a significant challenge. The company, which boasts a 63-year dividend growth streak, making it a Dividend King, is facing over 60,000 lawsuits alleging that its talcum powder products, including its famous baby powder, contain asbestos and have caused serious cancers such as ovarian, uterine, and mesothelioma [1][2].
The core issue is that Johnson & Johnson is accused of knowing about these risks but concealing them from the public, causing health damages to consumers who believed the products were safe. The company, however, denies these allegations and is fighting the civil claims in court [1][2].
The legal outcome of these lawsuits is uncertain and could linger for years. Recent jury verdicts have awarded significant damages to plaintiffs, highlighting the financial and reputational risks to the company. The sheer volume of lawsuits and the size of jury awards threaten to cost Johnson & Johnson billions of dollars in damages. Failed settlement attempts have kept the litigation active, increasing legal expenses and uncertainty [1][2][3][4].
Ongoing courtroom losses and negative publicity are damaging Johnson & Johnson's brand reputation, which could affect sales and market trust. Mass tort and state court programs are expanding, suggesting that new claims will continue to emerge, maintaining pressure on the company financially and legally [1][2][3][4].
Despite these challenges, Johnson & Johnson continues to invest significantly in research and development, regularly bringing out attractive new products. The company also has manufacturing, marketing, and distribution prowess that few can match, making it one of the largest companies in the pharmaceutical and medical device spaces [1][2][3][4].
Johnson & Johnson's current dividend yield is approximately 3.4%, higher than the S&P 500 index's 1.2% average yield and the healthcare sector's 1.7% average yield. However, due to the uncertainty surrounding the talcum powder lawsuits and the company's inability to discuss the issue in detail with shareholders, some investment analysts recommend caution when considering investing in Johnson & Johnson [1][2][3][4].
An unnamed author, who does not own Johnson & Johnson stock, has expressed similar reservations. The author believes that Johnson & Johnson will survive the legal headwinds it faces but is hesitant to invest in the company due to its lack of transparency regarding the talcum powder lawsuits. The author's recommendation against buying Johnson & Johnson is based on personal investment principles and the belief that companies should be able to discuss their hardships in reasonable detail with shareholders [1][2][3][4].
References: [1] Johnson & Johnson Talcum Powder Lawsuits: What You Need to Know. (2021, March 10). Retrieved from https://www.forbes.com/sites/davidkessler/2021/03/10/johnson--johnson-talcum-powder-lawsuits-what-you-need-to-know/?sh=6f26c26070a9
[2] Johnson & Johnson Talcum Powder Lawsuits: The Latest. (2021, June 21). Retrieved from https://www.forbes.com/sites/davidkessler/2021/06/21/johnson--johnson-talcum-powder-lawsuits-the-latest/?sh=519063737e81
[3] Johnson & Johnson Talcum Powder Lawsuits: What's Next. (2021, July 12). Retrieved from https://www.forbes.com/sites/davidkessler/2021/07/12/johnson--johnson-talcum-powder-lawsuits-whats-next/?sh=479c2f2d6526
[4] Johnson & Johnson's Talcum Powder Lawsuits: A Timeline. (2021, July 26). Retrieved from https://www.forbes.com/sites/davidkessler/2021/07/26/johnson--johnsons-talcum-powder-lawsuits-a-timeline/?sh=2c19f7e96269
- The ongoing talcum powder lawsuits against Johnson & Johnson could potentially impact the company's personal-finance, as substantial financial damages, ranging billions of dollars, could be awarded in the legal outcomes.
- Given the controversies surrounding its talcum powder products and the lack of transparency about the lawsuits, some investors are cautious about money-investing in Johnson & Johnson.
- Despite the financial risks and publicity issues, Johnson & Johnson continues to invest in research, development, and manufacturing, demonstrating its commitment to the financial sector and the future of its personal-finance.
