Johnson & Johnson Revises Guidance After Kenvue Spinout. There’s Good News on the Dividend.
Johnson & Johnson revises its financial guidance after spinning out Kenvue, but maintains its dividend and anticipates faster revenue growth.
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Posted 8/30/2023, 2:11:00 PM
barrons.com
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Johnson & Johnson's exchange offer for Kenvue shares was highly successful, with participating investors converting less than a quarter of their J&J stock into Kenvue shares.
This article mentions Johnson & Johnson (NYSE:JNJ) as the stock being discussed. The author's recommendation is to buy this stock for portfolios with a lower risk tolerance.
The author's core argument is that despite recent challenges, Johnson & Johnson is attractively valued and well-positioned for long-term growth and increasing shareholder returns. They highlight the company's AAA-rated balance sheet, its mix of growth and value, and its ability to protect investors from market turmoil.
Key information and data include the underperformance of JNJ shares compared to the S&P 500, the uncertainty surrounding baby powder lawsuits, the company's future growth opportunities in MedTech and Pharmaceuticals, its commitment to R&D and innovation, and its shareholder distribution strategy, including a 3.0% dividend yield. The article also discusses the company's valuation and suggests that it may be trading below its fair value.
Johnson & Johnson (JNJ) recently spun off its consumer healthcare products division in an effort to unlock value in its pharmaceutical business, but while this move may lead to slightly better growth, analysts are skeptical that it will deliver market-beating returns over the next decade. The author divested their JNJ investment due to underperformance and a low dividend growth rate, but still considers it a good choice for those seeking stability and safe income.