Is Johnson & Johnson Stock a Buy Now?
If size were a guarantee of performance, Johnson & Johnson (NYSE: JNJ) would be one of the best healthcare stocks to buy, being one of the largest by market cap in the sector. But things aren't that simple, and in fact, the company recently decided to slim down by spinning off its consumer health segment, which was home to several famous over-the-counter healthcare brands. The new J&J still has many qualities that made it successful, but is it worth investing in the drugmaker? Let's find out.
J&J completed the spinoff of its consumer health division earlier this year. The new company, called Kenvue, started trading on the NYSE on May 4. While this segment added considerable diversity to J&J's overall business, there were drawbacks, too. First and most significant, the company's consumer health unit was holding down revenue growth.
J&J's remaining segments, medical device and technology and pharmaceuticals, typically increase sales faster. Second, larger businesses tend to be harder to manage. Companies often end up spreading their resources thin. While that may not be too big a problem if every segment is performing optimally, in this case, J&J decided that increasing its focus on its higher-growth divisions would be better for the company and its shareholders.
Source Fool.com
