Intro to Investing Project

PSIA Weekly Project Intro to Investing David Wang | [email protected] Beta P/E Debt/Equity EV/EBITDA JNJ .54 32.19 .6068 11.7x PG .41 25.27 .7398 17.6x MDLZ .65 23.05 .741 16.3x 1. JNJ was the most attractive of the three stocks I chose from the consumer staples sector. Johnson and Johnson is a multinational conglomerate specializing in the production of household health products and more. It is the 15 th largest company in the S&P 500. JNJ is a very conservative stock as its size and diverse production pipelines, leading it to have a beta of .54, which is significantly below 1. In addition it its beta, JNJ has a P/E ratio of 32.19, a premium compared to Procter and Gamble's 25.27 and Mondelez's 23.05. Despite its large size and multitude of cashflows, JNJ has a D/E ratio of .6068 which is better than its competitors at .7398 and .741 respectively. Johnson and Johnson's EV/EBITDA ratio, 11.7x, indicates a relatively healthy company debt compared to its value. 2. Procter and Gamble is middle of the three companies chosen from the consumer staples sector. PG primarily produces nondurable household goods like soap, razors, toothpastes, and etc. but it also has other avenues of production. PG is the 17 th largest company on the S&P 500 and like JNJ, is a conservative stock, trading at a .41 beta. PG's P/E ratio is 25.27, which is cheaper than JNJ but more expensive than Unilever. PG would drive earnings faster than UL but not enough as JNJ. PG has a D/E ratio of .7398, a very respectable number. 3. Mondelez is the last of the three companies I chose. MDLZ is a multinational producer of consumer goods like confectionaries, beverages, and snacks. Like the other two companies, Mondelez presents as a conservative stock, trading at a beta of .65. The company has a P/E ratio of 23.05 which is comparable to PG but significantly below JNJ's 32.19 Its P/E ratio is also a premium compared to many other companies within the sector but may lack the ability to drive earnings as quickly as the others. MDLZ has a D/E ratio of .741 but has a EV/EBITDA ratio of 16.3x which indicates a larger debt compared to the value of the company.
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