How to Buy GlaxoSmithKline



Investors can choose many different companies to invest in. GlaxoSmithKline is very popular with many investors.

Background

GlaxoSmithKline, or GSK is a multinational pharmaceutical company with its headquarters still based in England. They are well known for producing vaccines, drugs and various other healthcare products. They are the third largest pharmaceutical company in the world.

GSK produces many different products in different areas. They produce products for controlling viruses, cancer, infection, diabetes and asthma. They also produce nutritional products which can be purchased over the counter, including Gaviscon and Horlicks.

GSK is listed on the London Stock Exchange. It is also one of the companies which makes up the FTSE 100 index. In December 2011 its market capitalization was £73.8 billion. This made it the fifth largest corporation on the LSE. GSK also has a secondary listing on the NYSE.

What is the Stock Worth?

The GSK stocks are currently trading at about $45 per share, this means that the total market capitalization is about $114 billion. Because of these impressive statistics it is the world’s third largest pharmaceuticals company.

GlaxoSmithKline Stock History Chart


Stock Price History

Pharmaceutical companies are popular with investors because some believe that they are recession proof. However, if you look at the charts above then you can notice that GSK was affected by the recession. In 2009 the share prices dropped to the low of $27 which is much lower than their highs. The company has since recovered.

It can be argued that the reason GSK was affected this much was possibly because GSK specializes in selling not only pharmaceuticals, but also over the counter products such as Horlicks which could be considered as non-essential.

Split History

Companies can decide to split their stocks to make it more affordable to investors. GlaxoSmithKline have only split once after flotation. This was split in 1991 and it was a 2:1 split. This meant that investors who previously had a single share in the company, now had two.

Will the Stocks be Split Again?

The stocks are currently trading at around $45, they have previously been as high as $60 so it is very unlikely that the stocks will be split soon. You should be buying these stocks for medium to long term growth, rather than trying to profit from quick short term gains.

Dividends

The last few years, GSK have paid a quarterly dividend which has a 5.85% yield. This may not sound much, but it is higher than competitors such as Johnston and Johnston which currently pays around 3.52% per year.

Should You Invest?

GSK has recently acquired some new patents for various products and new drugs. They are also preparing to launch Amarin, a drug designed to help reduce cholesterol.

Pharmaceutical companies are interesting to invest in, because you never know what drug they will invent next. However, sometimes these expensive drugs will fail in trials and not make the company any money.

As GSK is investing in new drug development, the outlook for the company looks good. It is expected that they will soon surpass their $60 high before the recession.




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