NSRGY - Is Johnson & Johnson Split Into Two Companies Good For Stock Investors?

• One of the oldest American companies JNJ was incorporated in 1886 and has been a health care leader throughout its history, annually increasing its dividend for 59 years.
• Its present plan to split into two companies spins off the consumer division (16% of sales) to focus on higher growth pharmaceutical and medical device areas.
• Claimants in the talc Baby Powder lawsuits argue that it's another measure to create a "barrier" to higher settlements: product liabilities and recalls have become frequent in recent years.
• I once compared JNJ's recalls and product liabilities to the impact of recessions on an industrial company; JNJ's footnoted "extraordinary items" resemble "company-specific recessions."
• JNJ is nevertheless a great portfolio stabilizer and diversifier as earning/dividend results and long-term charts show, and it is currently cheaper than most dividend growth stocks.

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