GlaxoSmithKline is a stock you can buy and forget

This global pharmaceutical giant continues to buy back shares and boost dividends.

By MoneyShow.com Nov 29, 2013 1:53PM
MoneyShow.comImage: Pills (© Sean Justice/Corbis)By David Fried, The Buyback Letter

One of the latest additions to our Buyback Portfolio is GlaxoSmithKline PLC (GSK), one of the world's leading research-based pharmaceutical and healthcare companies.

The London company holds an estimated 7% of the world's pharmaceutical market and employs around 99,000 people in more than 100 countries. The company bases its North American operations in the Research Triangle Park of North Carolina's Raleigh-Durham area, where it has about 6,000 employees.

Glaxo makes almost 4 billion packs of medicines and healthcare products every year, screens some 65 million compounds every year in a search for new medicines, and supplies one quarter of the world's vaccines.

It is one of the few pharmaceutical companies researching both medicines and vaccines for the World Health Organization’s three priority diseases -- HIV/AIDS, tuberculosis and malaria -- and has developed some of the leading global medicines in these fields.

Glaxo highlighted six drug candidates for R&D delivery at the beginning of 2013, and four have now been approved, showing serious muscle in that arena.

Analysts often consider it a financially sound stock to buy and forget. Indeed, dividends keep rolling in to the tune of 4.7% for 2013.

The company is big enough to weather storms, and it generates a lot of cash flow, which it uses to reward shareholders with buybacks and generous dividends.

During the past few years when big pharma was, in theory, vulnerable to cheaper competition, Glaxo grew its dividends and has yielded 4.5% to 5.5%. Next year’s expectation is 5%.

The company also is still focused on reducing costs and improving processes -- always a worthy goal. In the last 12 months, management has reduced shares outstanding by 14.92%.

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6Comments
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What about billion dollar side effect settlements
Nov 30, 2013 10:34PM
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I bought glaxo stock back in 1982 and basicaly forgot about it, now it is worth a lot wish I had put more money in to start.Glaxo has been a very stable company and they take care of employees even during mergers. 
Dec 1, 2013 12:46PM
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As far as "bribes" go -  When dealing in an international arena bribes are a part of doing business . No bribe = no business.  This isn't something that just happens in 2nd or 3rd world countries.  It also happens right here in the USA except it's called a "campaign contribution" along with dinners, exotic vacations, hunting trips, etc.

 

The drugs taken 30 years ago also have side effects.  Today's drugs have less severe side effects in most cases and have proven to prolong life and give a better quality of life in most situations.  Not all is perfect but for those who, as an example, suffer from heart disease have had their lives extended and live a much more normal life and healthier life.   IMHO

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Unless you have multimillions to stash away in safe high-priced securities, your best buy-and-hold  strategy is to buy Leaps, not the underlying Stocks.  High-frequency trading has made everything a gamble these days.  Listen to ArtemisSmith's GrandmaMoseX and buy her books in Kindle and Nook.
Nov 30, 2013 11:23PM
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It might be a good investment but the evil they do, the bribes they pay, will eventually come back to them...  So many new drugs are not much better than the older ones but they come with many more side effects.  They soft peddle these to doctors and they push them to prescribe the latest because they make the most on them.  I would not want to take any drugs newer than 30 years old. Then I know I am not their test dummie!
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