Johnson And Time Warner Comparison Paper

Decent Essays
In the healthcare industry both Johnson & Johnson and Eli Lilly Company has a beta of less than 1%. This means both companies stock remain constant on the market, regardless of the markets up and down swings. In looking at Johnson $ Johnson with a beta of .67 this means the company stock is 33% less volatile (risky) as others in that market. Therefore, as the market prices goes up and down, it is expected that Johnson & Johnson will be underperform by 33% when the market is up and outperform by 35% when the market is down. Both companies have a lower risk but that also means sometimes less return. Consumers can go with cars and even cable but it difficult for individuals to go without healthcare. Healthcare (products and services) are considered inelastic, which makes it hard for consumers to stop buying what is needed or find adequate substitutes. In comparing…show more content…
These stock are fast growing and tend to offer a better return but is also considered a high-risk. For example, DISH beta is 1.18; therefore, it is 18% higher than the market average. As the market and economy changes (downslopes) the demand for cable TV will decrease, as the demand decreases so will the returns. In comparing the betas and returns for Dish and Time Warner, Time Warner has far exceed Dish on total returns and surpassed the S&P index. Some of the reasons for this major gap, should be explained in the services and contract requirements. Although, having cable is considered a “want” and not a “need” many families find it difficult not having cable TV in their homes. They are willing to pay for this expense; however, due to the uncertain of the economy they want the option to cancel services without paying fees. Time Warner offer consumers a no contract service. As the economy begins to grow consumers are willing to invest (even if temporarily) in luxuries should as cable
Get Access