Johnson & Johnson’s Spin-off of Kenvue: Two Defensive Stocks to Consider Amid Market Volatility
In today’s volatile market conditions, investors are on the lookout for resilient defensive stocks that can help shield their portfolios from market fluctuations. Two such stocks that have caught the attention of investors are Johnson & Johnson (JNJ) and its recently spun-off subsidiary, Kenvue. Let’s delve deeper into the reasons why these healthcare sector stocks present attractive buying opportunities.
Resilient Defensive Stocks: Johnson & Johnson (JNJ)
Johnson & Johnson is a leading multinational corporation and a component of the Dow Jones Industrial Average. The company operates in three primary business segments: Pharmaceuticals, Medical Devices, and Consumer Health. JNJ’s diverse business model, which includes a strong presence in both developed and emerging markets, has helped the company weather economic downturns and market volatility in the past.
One of the reasons JNJ is considered a defensive stock is its low beta. A stock’s beta measures its volatility relative to the market. A beta below 1 indicates that the stock’s price is less volatile than the market. JNJ’s beta is currently around 0.4, which is significantly lower than the market average. This makes JNJ an ideal choice for investors seeking to minimize risk in their portfolios.
Another attractive feature of JNJ is its dividend. The company has increased its dividend for 58 consecutive years, making it a member of the S&P 500 Dividend Aristocrats Index. JNJ’s current dividend yield is around 2.4%, which is higher than the average dividend yield for the S&P 500. This makes JNJ an appealing option for income-focused investors.
Resilient Defensive Stocks: Kenvue
Kenvue, Johnson & Johnson’s newly spun-off pharmaceutical subsidiary, is another defensive stock that warrants consideration. Kenvue was created through the separation of JNJ’s consumer health business, which includes well-known brands like Tylenol, Listerine, and Zyrtec. The new company is focused on developing and commercializing prescription pharmaceuticals.
Like its parent company, Kenvue also boasts a low beta and a dividend. The company’s beta is around 0.5, making it less volatile than the market. Kenvue’s current dividend yield is around 1.8%, which is lower than JNJ’s yield but still higher than the average for the S&P 500. With a strong pipeline of drugs and a focus on specialty pharmaceuticals, Kenvue is well-positioned to deliver consistent earnings growth.
Impact on Individual Investors
For individual investors seeking to build a well-diversified portfolio, adding defensive stocks like JNJ and Kenvue can help mitigate risk and provide a steady stream of income. These stocks’ low betas and relatively high dividends make them attractive options for income-focused investors and those seeking to minimize risk in their portfolios.
Impact on the World
The healthcare sector, and defensive stocks like JNJ and Kenvue, can have a significant impact on the global economy. The healthcare industry is a large and growing sector, with spending projected to reach $10.6 trillion by 2022. Defensive stocks within the sector, like JNJ and Kenvue, can help stabilize the economy during times of market volatility by providing consistent earnings and reducing overall market risk.
Conclusion
In conclusion, Johnson & Johnson and its spin-off, Kenvue, are two resilient defensive stocks that offer attractive buying opportunities for investors in the volatile healthcare sector. Their low betas and relatively high dividends make them ideal additions to income-focused and risk-averse portfolios. As market conditions remain uncertain, these defensive stocks can help shield investors from market fluctuations and provide a steady stream of income.
For individual investors, adding defensive stocks like JNJ and Kenvue to their portfolios can help mitigate risk and provide a steady source of income. For the global economy, the healthcare sector and defensive stocks within it, including JNJ and Kenvue, can help stabilize the economy during times of market volatility and provide consistent earnings growth.
- Johnson & Johnson and its spin-off, Kenvue, are two resilient defensive stocks in the healthcare sector.
- Both JNJ and Kenvue have low betas and relatively high dividends, making them attractive options for income-focused and risk-averse investors.
- JNJ’s diverse business model and long history of dividend increases make it a stable and consistent performer.
- Kenvue’s focus on prescription pharmaceuticals and strong pipeline position it for consistent earnings growth.
- Defensive stocks like JNJ and Kenvue can help stabilize the economy during times of market volatility by providing consistent earnings and reducing overall market risk.
