GSK Stock: GlaxoSmithKline PLC Is a High-Dividend Stock
- Buz Investors GlaxoSmithKline PLC One sector that is known for large gross margins is the healthcare sector. Typically, high-gross-margin businesses are not looked at by dividend investors, the reason being that there is often no dividend.
- However, GlaxoSmithKline PLC (ADR) (NYSE:GSK) is an exception, being company that has large gross margins and is a high-dividend stock.
- GlaxoSmithKline (GSK) is a global company that is based in the U.K. and with a presence in more than a 150 counties.
GlaxoSmithKline PLC Is a High-Dividend Stock
GlaxoSmithKline PLC Due to the diversified nature of the business, if one of the segments is underperforming, there is always one of the other divisions to offset the slower growth numbers. When looking at the latest quarterly earnings, the evidence is in the numbers.
Sales in the third quarter came in at eight percent, compared to the same quarter in the previous year. All the divisions saw growth, only the Vaccine division’s growth was extraordinary, seeing 20% growth. Meanwhile, the Consumer Healthcare and Pharmaceuticals segments saw five percent and six percent growth,
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respectively. (Source: “Third quarter 2016,” GlaxoSmithKline PLC, October 26, 2016.)
But for global companies, it’s a different story. In the U.S., for example, interest rates are sitting at historic lows of 0.25% to 0.50%. On the other end of the spectrum, India has interest rates of five percent to 7.25% on savings accounts. India would be a great example of putting money into a savings account until the currency favors GSK. With so many different options for the company to drive up the bottom line, GSK can remain a high-dividend stock.