Healthcare products maker Covidien plc ( COV ) on Thursday announced it would split off its pharmaceuticals business into a separate publicly-traded company.
The transaction, which could take up to 18 months to complete, would be tax-free to U.S. shareholders, as it would entail the distribution of shares in a new public company.
Covidien, through its pharma unit, is one or the largest producers of bulk acetaminophen, the most popular pain-killing drug in the U.S. The company is also one of the top generic pharmaceuticals makers in the world based on total prescriptions.
Covidien shares were mostly flat in premarket trading Thursday.
The Bottom Line
Shares of Covidien plc ( COV ) have a 2.13% dividend yield, based on last night's closing stock price of $42.16. The stock has technical support in the $39-$40 price area. If the shares can firm up, we see overhead resistance around the $45-$48 price levels.
Covidien plc ( COV ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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