I tendered half my JNJ shares for KVUE shares, and I hope I get the full allotment.

First, I'm super-annoyed about the separation of the consumer branded portfolio from JNJ. There's absolutely no reason it needed to be done once JNJ decided that the corporate parent would retain most of the talc liabilities. Additionally I loved the steady cash flow produced by the consumer brands and how much less cash that section of the business needed compared to the research pharma and medical devices segments. The steady free cash flow produced by the consumer branded business both stabilized the dividend and earnings while the more feast or famine pharma and device segments went through the natural ebbs and flows of those types of businesses. The consumer brands also threw off FCF that could be redirected to R&D activities on the pharma and device side in pursuit of growth in these higher margin businesses.

Now a lot of the decision to tender shares depends on personal circumstances (are these shares tax protected, are you after growth or income, etc.), but KVUE is being set up to succeed as a strong consumer branded play with international reach, a higher dividend yield than JNJ (which may be even greater if JNJ rebases their dividend after the split-off), and an extra ~5% in value just for tendering shares.


I've advised family members to tender at least a third and up to half of their shares in JNJ.