Healthcare companies have been known for their defensive nature and safeguarding investors’ portfolios for a long time. Since the onset of the COVID-19 pandemic, these stocks have become everyone’s favourites, riding on various advancements in the sector.
Today, we have picked two healthcare giants, GlaxoSmithKline (GB:GSK) and AstraZeneca (GB:AZN), from the UK market. According to analysts, GSK has a Hold rating on TipRanks while AZN gets a Moderate Buy. In addition, these companies also tick the box for income investors with their dividends.
Let’s have a closer look at them.
GlaxoSmithKline PLC
GlaxoSmithKline (GSK) is a leading pharmaceutical company well-known for its broad portfolio of vaccines all over the world.
The company’s stock has been trading down by almost 10% in the last year, underperforming the overall market’s returns. The shares were mainly hit after the company completed the demerger of its consumer health business and formed Haleon PLC (GB:HLN) in July 2022.
This move has improved the company’s focus on pharmaceuticals and vaccines, which are higher-margin business segments for GSK. The company currently has more than 60 vaccines and medicines in the pipeline, hinting at long-term revenues and profits.
In terms of dividends, GSK remains a popular pick from the FTSE 100 index. Citigroup analyst Andrew Baum predicts an annual dividend of 56.5p per share for 2023 and 59.9p per share for 2024. The total dividend for 2022 was 44p per share.
GSK Share Price Target
Based on a total of 12 recommendations, GSK stock has a Hold rating on TipRanks.
The average target price is 1,610.0p, which suggests an upside of 11% on the current price. The price has a high forecast of 2,000p and a low forecast of 1,300p.
AstraZeneca PLC
Contrary to GSK, AstraZenaca’s stock has gained over 13% in the last year. The company has a diversified portfolio of medicines across various segments, which provides an extra layer of safety to its top-line growth.
The company also gained a lot of traction due to its successful COVID-19 vaccines in the last few years. Now, as the demand for these vaccines has dropped, the company is back to its solid product pipeline for 2023. The company is eyeing huge revenue growth with these products, which are specially targeted for breast cancer and kidney diseases.
The company has projected around 30 products in phase three trials in 2023, of which it expects 10 to be its “blockbuster” products, leading to higher revenues. In 2023, the company expects its revenues to increase by a low-mid single digit, as compared to the previous year.
Analysts believe the company’s main strength is its ability to develop successful products, along with its well-balanced portfolio.
The total dividend for the company in 2022 was $2.90 per share, slightly up from $2.87 in 2021.
Is AstraZeneca a Good Stock to Buy Now?
According to TipRanks’ rating consensus, AZN stock has a Moderate Buy rating.
The average target price is 11,872.7p, which is 5.16% higher than the current price.
Conclusion
Both GSK and AZN are leading names in the global healthcare industry. These stocks, with their global presence, solid product portfolio, and good dividend income, are safe investment options for investors.
