Large companies can often get bloated over the years by becoming too diverse and pursuing too many different growth opportunities. By spinning off parts of their businesses, they can cut costs and free up resources to focus on areas of their operations that have better long-term prospects.

Two companies that are planning spinoffs this year that could become better businesses after that happens are Johnson & Johnson (NYSE: JNJ) and Kellogg (NYSE: K). Here's a look at what they are spinning off, and why the moves could be good ones for these stocks.

Johnson & Johnson has been a safe stock to own over the years. The healthcare company pays a good dividend that yields around 3%, and it has been increasing it for 60 straight years, making it a Dividend King. It hasn't offered much in the way of growth; revenue of $94.9 billion in 2022 was just 16% higher than the $82.1 billion it reported in 2019.

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Source Fool.com