Merrion Stockbrokers is tipping Johnson & Johnson stock as a buy while the shares are trading at relatively low price of $87.5. The recent dip in the share price is due to its latest acquisition, Alza, which it is paying for with its own shares.

Merrion says the stock has been a "classic performer" for investors, delivering double-digit earnings growth since 1987. In the next couple of years earnings growth is expected to be between 13 per cent and 15 per cent.

Johnson & Johnson, the US pharmaceutical and consumer products company, is one of the few product companies that can claim to have a strong global franchise, according to Merrion. It has entered into alliances and collaborations that, together with its strong research commitments, are keeping its product pipeline constantly replenished. The Alza acquisition will also bring new drugs to the company's range.