GSK vs. AstraZeneca: The SHOCKING Showdown!
From Hero to Zero: The Rise and Fall of GlaxoSmithKline!
When I stepped into the wild world of finance over TWO DECADES AGO, GSK was the darling of the FTSE 100! That powerhouse, born as GlaxoSmithKline, was even eclipsing rivals like AstraZeneca. But hold onto your hats, folks—in today’s twisted tale, that’s so yesterday!
AstraZeneca: The UK’s Pharma Titan!
Fast forward to today: AstraZeneca, under the visionary gaze of CEO Pascal Soriot, has soared to become the UK’s pharmaceutical giant! Just last summer, it strutted around with a market cap over a mind-blowing £200 billion. Sure, it’s down to £166 billion now, but that’s still nothing to sneeze at!
Since the dawn of the millennium in January 2000, AstraZeneca’s share price has skyrocketed from 2,395p to a WHOPPING 10,775p! That’s an astronomical 350% gain— and we’re not even talking dividends yet!
GSK: Turbulence Ahead!
Meanwhile, GSK’s journey has been one wild ride! Once peaking at a dazzling 1,767p, it’s now sunk down to a shaky 1,482p. Ouch! And while dividends were the safety net for investors, they’ve shriveled like yesterday’s news.
GSK’s dividends, which once dazzled the market with yields between 5% and 6%, hit a DEAD END! Stuck at 80p from 2014 to 2021, all while CEO Emma Walmsley plowed shareholder cash into research and development. A desperate attempt to jumpstart a stagnating drugs pipeline!
The Disappearing Dividends!
In a shocking twist, dividends plummeted to 57.75p in 2022 after the HALEON SPIN-OFF and only crawled back up to 61p this year, offering a meager yield of 4.1%. Is this the comeback we’ve all been waiting for?
But wait! Could there be hope on the horizon? GSK’s latest Q1 2025 results sent shockwaves through the market, sparking a 7.5% surge in share prices over the past week! Still, it’s down a staggering 11% over the past 12 months.
They flaunted sales of £7.52 billion, a 4% increase year-on-year, with Specialty Medicines leading the charge! Imagine—sales skyrocketed 17% in THAT sector, including a jaw-dropping 53% surge in Oncology! Operating profit? Up by 50%!
A Promising Outlook?
GSK now predicts a full-year dividend bump to 64p per share, a nearly 5% rise, and plans a colossal £2 billion share buyback—£273 million already repurchased in Q1. And brace yourselves: they expect turnover growth of 3-5%!
AstraZeneca’s Unrivaled Streak!
On the flip side, AstraZeneca flaunted their own numbers, posting a 10% revenue surge to a staggering $13.6 billion. Core EPS jumped 21% to $2.49! Stock market reactions? Mild, because this titan has set the bar HIGH!
But here’s where it gets JUICY: While I’m not holding AstraZeneca shares (too pricey!), I decided to roll the dice on GSK, believing they were prime for a comeback. Spoiler alert: I’m sitting about 20% down, and the fear of US tariffs on Pharma imports looms large!
The Final Countdown!
Walmsley is convinced GSK can navigate these turbulent waters with cutting-edge AI and supply chain tweaks. As a contrarian investor, I’m sticking with GSK, convinced there’s gold to be mined at a price-to-earnings ratio of just over eight—less than HALF of AstraZeneca’s P/E of 17!
The recent uptick is promising, but the road remains treacherous! With Walmsley’s masterplan still a work in progress, can GSK rise from the ashes? Buckle up, because the drama is far from over!
