Benzinga - by AJ Fabino, Benzinga Staff Writer. Investors met Johnson & Johnson’s (NYSE:JNJ) recent $35 billion exchange offer for Kenvue Inc (NYSE:KVUE) with a high level of participation.
Just 23.8% of J&J shares will be accepted for exchange for Kenvue's stock — much less than many had anticipated.
A Brief Exchange Recap: For every $100 in J&J shares, shareholders were being offered approximately $107.50 in Kenvue stock.
The arbitrage trade, paired with the exception that J&J shareholders with fewer than 100 shares would not be subject to proration, led to a substantial 30% of J&J’s outstanding stock being tendered.
As of now, a participating J&J shareholder hoping to exchange 1,000 shares, can expect about 1,911 shares of Kenvue, while still holding onto 762 shares of their original J&J stock, according to Barron's estimates.
The Dividend Implication: While the exchange offer with Kenvue is taking the spotlight, income investors might wonder about potential yields from holding onto J&J, given its reputation in the market.
Earn From Johnson & Johnson Dividends Investors seeking to earn $500 monthly from J&J's dividends would need an investment of about $217,391.30. That translates to owning around 1,299 shares. For those eyeing a more modest $100 monthly dividend income, an investment of roughly $43,478.26 or 260 shares would work.
The dividend yield can change on a rolling basis. The dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.
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If a $50 stock pays an annual dividend of $2, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
The dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
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