Take Johnson & Johnson, for example. The New Brunswick, N.J.-based company makes everything from Band-Aids and Tylenol to knee implants and prescription drugs, all of which are fairly resistant to a global slowdown, Cramer said. Its stock currently sports a juicy 3.9 percent dividend yield, too.
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Perhaps more importantly, though, is the possibility that Johnson & Johnson could split into two companies. As avid “Mad Money” viewers know, Cramer thinks a break-up can often unlock a lot of value for shareholders. The company has done anything to indicate that it’s thinking of splitting up, but analysts at Goldman Sachs on Thursday released some research that makes the case for why Johnson & Johnson break up.
In its research, Goldman noted that Johnson & Johnson currently consists of three businesses that don’t have much, if anything, in common. The businesses include a pharmaceuticals company, consumer company and medical device company. If it were to break itself up into three pieces, though, Goldman thinks each individual business would likely be an industry leader.
“Don’t forget the logic behind these breakup stories: big institutional investors, like mutual funds, either prefer to own growth stocks or value stocks,” Cramer noted. “If, like Johnson & Johnson, they’re too big, with a mix of growth and value, more and more companies are realizing they need to break up so their stocks can get the respect they deserve.”
