NEW YORK ( TheStreet) -- Sometimes when an investor wants exposure to the pharmaceutical and health care sector it's better to buy an exchange-traded fund for the sake of diversity.Many want to own the best-in-breed or, more specifically, the best-in-the-sector. Yet, what if you're already invested in two of the great ones like Pfizer ( PFE) and Merck ( MRK)? Your asset allocation strategy may say it's time to sell one and use that cash to buy the Big Kahuna of drugmakers, over-the-counter remedies, medical products and other related consumer goodies. I'm referring to Johnson & Johnson ( JNJ). With a market cap of more than $246 billion, it's arguably the world's largest health care company. JNJ has three divisions: pharmaceutical, medical devices, and diagnostics and consumer. Pharmaceutical accounts for 38% of the company's revenue and has been the highlight because of its strong pipeline, especially in oncology and immunology, which helped to drive 12% revenue growth in the second quarter. Jim Cramer and Stephanie Link at Action Alerts PLUS wrote on Friday, "We see continued strength in these two segments
Consumer products account for 21% of JNJ's total sales, and this segment has continued to perform well since Johnson & Johnson acquired Pfizer's consumer division back in 2007. My enthusiasm for JNJ also stems from its shareholder-friendly history. It has increased its dividend each year for a half a century, which is partly why it's been one of Warren Buffett's favorites. Former Chairman and CEO William Weldon owns over 307,000 shares of JNJ as of Feb. 2013. The current JNJ chairman and CEO, Alex Gorsky, owns nearly 70,000 shares. Many favor JNJ's strength and the diversification of its global businesses. It maintains a strong balance sheet, produces earnings surprises and has rock-solid management execution. At the Friday close of $87.16, the stock is down almost 8% from recent highs so we have a chance to buy the best on sale. Agreeing with Link and Cramer that a target price of $94 is reasonable, I also favor buying any dips. You might also consider a trailing stop loss alert system like TradeStops to track the performance of your JNJ shares, protect your profits and to limit your chances of unacceptable losses. I've tested it and used it for years and I favor it as a stealth way to set trailing stop losses without the chance of being "picked off" by vigilant market-makers. It's also an effective way to keep our emotions out of the investing process. Wishing you good fortune and best returns! At the time of publication the author is long JNJ and PFE. Follow @m8a2r1 This article was written by an independent contributor, separate from TheStreet's regular news coverage.