I bought the FTSE 100 pharmaceutical giant in March 2024 precisely because the shares had struggled for years. Former CEO Emma Walmsley froze the dividend and funnelled cash into research and development to rebuild GSK’s weakening drugs pipeline.

Other issues hurt sentiment too. Investors worried about patent expiries, legal battles over its Zantac heartburn treatment, sluggish vaccine sales after the pandemic, and fears that the company lagged rivals in breakthrough obesity drugs.

Why did this FTSE 100 stock finally take off?

It was a thankless task for Walmsley, and the shares never really took off under her leadership. Still, I bought because the valuation looked tempting, with a price-to-earnings ratio of around eight. I was disappointed by the lower yield. The days of 5%-plus dividend income had long gone. I locked into a yield of just over 3%, hoping shareholder payouts would improve as new treatments boosted revenues.

The shares drifted lower for months before bouncing after Walmsley stepped down in December 2025. Full-year results published on 5 February this year were encouraging. Sales rose 7% to £32.7bn while core operating profit climbed 11% to £9.7bn. Free cash flow surged 41% to £4bn.

Net debt crept up to £14.5bn, higher than I expected. But the first results published under new CEO Luke Miels suggested that GSK might finally regain its momentum. Management kept its long-term 2031 sales target above £40bn intact too.

Yet the last three months have been bumpy, and the shares have fallen 12%. That would shrink a £13,000 investment to about £11,440, a paper loss of £1,560. While disappointing, it’s not a huge issue. Shares move up and down all of the time. Over 12 months, GSK share price is still up 27%.

I plan to hold my my shares for years, hopefully decades. Ageing populations and rising healthcare demand should create huge opportunities over time. GSK also has exposure to the massive US market, where it generates roughly half of all its revenues.

Should investors consider buying GSK today?

First-quarter results on 30 April showed progress. Free cash flow rose another £100m to £800m, supporting a forward dividend yield of 3.6% and leaving room for share buybacks. Yet it wasn’t enough. Net debt climbed again to £15.6bn. Forecast sales growth of 3%-5% across 2026 underwhelmed. I’m also concerned about its HIV medicines, as lucrative patents begin to expire in the next two or three years.

Drug companies operate under relentless pressure. Treatments take years to develop, trials can fail at the final hurdle, and there are political risks too. US tariffs remain a concern, although GSK has expanded manufacturing investment in America to reduce exposure there.

Even so, I still think the shares look good value with a price-to-earnings ratio of 11.15. I believe GSK deserves a place in a long-term portfolio and remains well worth considering today. I’ll be keeping a close eye on that pipeline though.

Should you invest £5,000 in GSK right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if GSK made the list?

Harvey Jones owns shares in GSK. 

The post See what £13,000 invested in GSK shares 3 months ago is worth today… appeared first on The Twelfth Magpie.

Profit-taking after a previous strong run-up in price was one reason behind the pullback, I think. Another may have been the decline in sales for its General Medicines division, although other divisions did better than expected.

In either event, the drop only adds to the glaring disconnect between the stock’s share price and the underlying value of the core business. And it is in this gap that big profits can historically be made by savvy long-term investors.

So how big is it?

How good are the results?

The newest results — Q1 2026, released on 29 April — are just the latest in a string of strong numbers highlighting growing earnings momentum across GSK. And it is growth here that ultimately powers gains in any company’s share price over time.

A risk for the firm is any slower‑than‑expected uptake for new launches in its Vaccines and Specialty Medicines divisions. Another is any major problem in one of its key products, which could prompt costly litigation.

However, core operating profit rose 10% year on year to £2.8bn, highlighting strong momentum across Vaccines and Specialty Medicines. Vaccines revenue increased 15% to £3.1bn, underlining the continued strength of Shingrix and newer launches.

Specialty Medicines rose 12% to £2.6bn, illustrating how expanding respiratory and HIV portfolios are driving mix improvement. Continued investment in late‑stage pipeline assets also supports visibility on medium‑term growth, giving GSK multiple engines to power earnings ahead.

What’s the ‘fair value’ of the shares?

Price and value are very different measures for stocks. Price reflects whatever buyers and sellers are willing to trade on at a given moment. But value is determined by the strength and prospects of the underlying business.

That distinction matters for long-term investors’ profits. Over time, market prices tend to move toward a company’s true worth (‘fair value’). This is why understanding and quantifying the gap between price and value is so powerful for building returns.

Discounted cash flow (DCF) analysis helps investors understand where a stock’s fair value is. It does this by projecting a business’s future cash flows and discounting them back to the present. The more uncertain those projections are, the higher the return investors demand, increasing the discount applied.

Analysts’ DCF models differ because their assumptions vary. Using my own inputs — including a 7.2% discount rate — GSK shares are 58% undervalued at their current £18.73 level. That implies a fair value of £44.60, more than twice today’s price.

So if markets continue drifting toward fair value, this could be a great buying opportunity if those DCF assumptions hold.

My investment view

GSK’s latest results underline a business with far more earnings strength than its current share price suggests. The scale of the undervaluation versus my fair‑value estimate looks unusually large for a company of this quality.

With the shares trading at such a steep discount, I will be adding to my existing holding in the stock at these bargain-basement levels. And I also have my eye right now on other deeply undervalued shares in other sectors too.

The post GSK’s share price is down 18% despite another set of strong results! Time for me to buy more for under £19 while I can? appeared first on The Twelfth Magpie.

I’ve just checked out my Self-Invested Personal Pension, and it’s fun all the way. Rolls-Royce Holdings, mining stocks, the banks, housebuilders, International Consolidated Airlines Group, even beaten-down spirits giant Diageo are all up between 5% and 9% on the day.

There’s inevitably an exception. Oil giant BP has slipped more than 3%. And it’s plunging for exactly the same reason almost everything else is flying. The Iran conflict.

Have we left it too late to buy cheap shares?

Since the war began on 28 February, markets have been at the mercy of news from the Gulf. When Donald Trump says all is going well, the oil price falls and shares soar. When the missiles start flying, the reverse happens. Yesterday, a barrel of Brent crude hit $112, and the FTSE 100 was plunging. Today, Brent is down to $102, and it’s flying.

This morning’s rally follows US suggestions that the “offensive” stage of the war with Iran is over. Time will tell. We’ve had weeks of this, and there’s likely to be more volatility to come. But it does remind us of an old lesson. Investors shouldn’t panic and sell in a crisis, because they’ll miss great days like this.

What they can do is turn market volatility to their advantage by snapping up their favourite stocks at lower prices on the bad days. I grabbed my chance on Friday (1 May), buying NatWest shares after they dipped 4.5% on poorly received Q1 results. I’m feeling a bit smug today, as they’re up 5.1%. So are there other FTSE 100 bargains out there, despite today’s rally? I think there are.

Are GSK shares a bargain buy?

Recent weeks have bumpy for pharmaceutical giant GSK (LSE: GSK). The shares have nudged up today, but they’re still down 11.4% over the past month. Last week (29 April) GSK published Q1 results showing sales up 5% to £7.6bn and underlying operating profit rising to 10% to £2.7bn.

However, the board disappointed markets by holding both 2026 guidance its 2031 sales outlook for more than £40bn. GSK shares sank on the day. Long-term investors won’t be too unhappy though. The GSK share price is still up 35% in a year, with dividends on top. So is the dip a chance to get in at a lower valuation?

I think it may be. GSK’s trailing price-to-earnings ratio is now a modest 10.8, while its forward dividend yield has crept up to 3.75%. In 2027, it’s forecast to top 4.1%.

There are risks with every stock. GSK needs to keep its pipeline of new treatments flowing. Net debt has crept up to £15.6bn. Governments are keen to squeeze drugs prices, which threaten margins. If GSK fails to beat that ambitious 2031 sales target, the shares could struggle.

Yet I think investors keen for exposure to the healthcare sector consider taking advantage of the recent dip. As GSK shows, there are always bargain buys out there, even on brilliant days like today.

The post What on earth’s going on with UK shares today? appeared first on The Twelfth Magpie.

• Oncology sales up 28%, Shingrix vaccine sales up 20%.
• Full-year guidance reaffirmed.
• Over £40bn sales targeted by 2031.

Some of the figures were a bit mixed, but I can’t help thinking investors might have missed the big picture. Let’s take a closer look.

Sales up, but…

Total sales in the quarter reached £7.6bn. But that did mean only a modest 2% rise — or 5% at constant exchange rates (CER). And though Shingrix led GSK’s vaccine sales, Arexvy vaccine sales fell 18%. And General Medicines dipped 6% at CER.

I don’t, however, really think that takes much of the edge off what looks like an impressive quarter. And I’m buoyed by what CEO Luke Miels had to say about upcoming prospects.

Alongside operational delivery, we are focused on execution and accelerating R&D. This is visible in filings we have achieved for bepirovirsen, our potential functional cure for hepatitis B; updated phase III plans for our oncology ADCs; and completed acquisitions for new pipeline assets: ozureprubart for food allergies, and HS235 for pulmonary hypertension.

These mostly target ailments on the rise in wealthy, developed, nations. Addressing those has to be a good thing, for so many reasons.

What should we expect?

A plan to exceed £40bn in sales by 2031 could make GSK shares a very nice long-term investment. And it could happily fuel a progressive dividend prospect. The company has 70p per share pencilled in for the full year, which would mean a 3.6% dividend yield on the price at the time of writing.

But what does management see happening in 2026? Full-year guidance (at CER) hinges on three key expectations:

• Turnover to increase between 3% and 5%.
• Core operating profit to increase between 7% and 9%.
• Core earnings per share to increase between 7% and 9%.

The shares look cheap

Investors had been piling into the stock after February’s FY25 results. I don’t see anything so far to take the shine off what was an impressive year, and GSK shares are still up 7% year to date. But enthusiasm appears to have cooled, with the price falling back.

Whatever’s turned investors off the stock, even if only briefly, I can’t really see it being valuation. Forecasts put the forward price-to-earnings (P/E) ratio at under 13. And that’s even with analysts predicting a 28% rise in earnings between 2025 and 2028.

There’s one major hurdle in the road ahead, though. GSK faces the expiry of a handful of blockbuster drug patents before the end of the decade.

Don’t panic!

Against that, it has a good number of very promising drugs reaching late trial stages. There’s nothing guaranteed, of course. And it’s good to be aware of the cost and risk of failure of any prospect.

But right now, I see this as a good time for long-term investors to consider GSK shares while the valuation looks a bit weak.

The post As GSK shares fall 5% on Q1 news, is this a buying opportunity? appeared first on The Twelfth Magpie.

So what’s behind this sudden popularity? And should I be following the crowd and investing too?

What just happened?

The sudden spike in buying activity hasn’t been caused by a single major news catalyst. In fact, the company hasn’t reported any earnings since February.

Instead, this newfound popularity is seemingly being driven by several compounding factors as we approach its next earnings report in just a few days’ time.

This includes:

• A still-reasonable valuation at 15.5 times earnings.
• Continued safe haven appeal against the wider macroeconomic and geopolitical uncertainty.
• A string of positive regulatory and clinical trial results.

As such, institutional analysts have built a relatively clear consensus for the firm’s upcoming earnings, including low-to-mid single-digit top expansion and high single-digit core operating profit growth expectations. But there are also some specific items that experts are watching closely.

What’s under the microscope?

GSK’s HIV franchise is a genuine cash machine as patients remain on lifelong medicines and closely follow their treatment regimens. That’s why it’s become one of GSK’s highest margin and most reliable parts of the business. But any surprise slowdown could spark wider concern.

Another area in focus is the group’s venture into oncology. Its four flagship cancer treatments (Zejula, Blenrep, Jemperli, and Ojjaara) are expected to generate £530m in revenue during the first quarter of 2026.

Another drug in analysts’ crosshairs is Depemokimab. This emerging respiratory treatment isn’t expected to deliver gangbusters revenue in 2026. But current forecasts have it on track to rise from around £187m this year to £875m by 2028. And any early commentary about this ramp-up will be closely monitored.

So far, this all sounds rather promising. But what are the key risks surrounding this FTSE 100 enterprise to watch out for?

Where are the weak spots?

Like most pharmaceutical giants, GSK’s facing a looming patent cliff with multiple blockbuster drugs losing their protection before the start of the 2030s.

As such, the race is on to discover new novel treatments to replace the expected loss in revenue and profits. And it’s why institutional analysts are paying such close attention to the progress of drugs in the development pipeline.

The risk for investors is that even late-stage clinical trials can often end up failing. After all, drug development is notoriously challenging, expensive, and uncertain. If a promising candidate in its vaccine or oncology portfolio fails, the FTSE stock’s recent surge in popularity might quickly start to reverse.

But is this a risk worth taking?

The bottom line

While the risk of poor clinical trial results cannot be ignored, it’s worth pointing out that GSK has quite a decent track record on this front. And thanks to these earlier successes, the group’s beaten analyst expectations for over four quarters in a row.

That clearly demonstrates talented leadership and a high-quality research pipeline. Therefore, investors looking for exposure to the pharmaceutical industry may indeed want to take a closer look at this FTSE 100 stock today. I know I certainly am.

The post UK investors are piling into GSK! Should I buy this FTSE 100 stock? appeared first on The Twelfth Magpie.

Back then, GlaxoSmithKline was seen as one of the most solid and reliable dividend stocks on the blue-chip index. A yield of 5%-6% seemed assured, with steady share price growth too. The shares were then plunged as the dot-com boom unwound and by 2004, they’d roughly halved. Progress since then has been patchy.

Until recently, the stock was bumping along near a 10-year low. Suddenly, that’s changed.

FTSE 100 big seller

GSK’s now the most popular stock among UK investors over the last week, accounting for 5.46% of all purchases on the AJ Bell platform. That’s more than double second-placed Legal & General, with just 2.63%. It’s also streaking ahead of big sellers like Microsoft, Rolls-Royce, BAE Systems, Nvidia and BP. So what’s driving the surge?

It’s not down to fresh news. GSK hasn’t reported since 4 February, when it posted a strong set of results. Full-year sales rose 7% to £32.7bn, while underlying operating profit climbed 11% to £9.8bn, slightly ahead of expectations.

New chief executive Luke Miels maintained the growth targets set by predecessor Emma Walmsley, with sales forecast to reach £40bn by 2031.

For years, GSK struggled as it worked to replenish its drugs pipeline after a string of blockbuster treatments came off patent. To fund that investment, Walmsley froze the dividend at 80p per share for eight long years to 2022. That dreary stretch culminated in a cut to 57.75p, instead of the hoped-for hike.

We’ve seen a couple of respectable dividend increases, lifting the full-year 2025 payout to 60.6p. Further growth seems possible, with free cash flow jumping 41% to £4bn.

Dividends and growth

Income seekers may be underwhelmed by the current yield of around 3.1%, but that’s partly because the share price has done so well. GSK is up an impressive 56% over the last year. I’m personally thrilled with that, having bought in two years ago.

GSK looks built for volatile times like today. I can see why it’s in demand. The valuation remains reasonable, with a price-to-earnings ratio of 12.3 (it looked like a screaming bargain with a P/E of eight when I bought it).

It’s also produced a string of clinical successes, which have further bolstered investor demand. But as with every stock, there are still risks. Like all pharmaceutical companies, GSK faces constant pressure to develop new treatments and vaccines. But the process is lengthy, and late stage failures are always a risk.

The sector’s also under pressure from governments to cut drug prices. US tariff concerns also linger, as do the risk of class action lawsuits.

Even so, GSK’s delivered. For investors with a long-term outlook, it still looks well worth considering. Yet after such a strong run, anyone buying today should be ready for a period of slower progress from here.

The post Suddenly investors can’t get enough of GSK shares! What’s going on? appeared first on The Twelfth Magpie.

But what’s behind this momentum? And is there more to come?

What’s going on with GSK shares?

I don’t think GSK’s purple patch of form is down to one thing. But let’s begin with good, old-fashioned earnings.

Full-year results for 2025 beat expectations. Revenue increased 7% to £32.7bn, helped by a 17% rise at its Speciality Medicines division (HIV, Oncology and Respiratory/Immunology). Core operating profit hit £9.8bn — an 11% uplift on the previous year.

Having been in top-tier peer AstraZeneca‘s shadow for so long, GSK’s pipeline is now starting to look more promising as well. No less than 13 new cancer drugs are currently in development, for example.

One could also argue that the market has now adjusted to the Brentford-based business’s decision spin off its consumer arm (Haleon) a few years ago and become a pure-play biopharma company. This implies a more growth-focused strategy — something that should appeal to a new audience of investors.

Still cheap

Despite it doing so well already, there are a few reasons for thinking the party might continue.

Q1 numbers are due on 29 April. Unless there are any nasties lurking, I don’t see why this stock can’t carry on rising in value. A positive sign has been the spate of director buying seen last month. We’re not talking small change either. If those who know the company best are willing to put their own money to work, I take that as very encouraging.

Second, the valuation remains reasonable. A price-to-earnings (P/E) ratio of 12 is still cheap relative to other companies in the healthcare sector. GSK also boasts above-average operating margins and returns on capital (essentially, what it gets back for the money it puts in the business), at least relative to other UK stocks.

The stock yields 3.4% too. Sure, it would be a mistake for investors to assume that any dividends are guaranteed. But GSK’s cash distributions look like they will easily be covered by expected profit. This assumes, of course, that analyst projections are on the money.

This is not to say that the £86bn cap is devoid of risk. An ongoing problem for pharmaceutical firms is that the patents on some of their drugs are set to expire. This includes GSK. On top of this, some/all of those aforementioned new drugs in development might fail.

Great option

As I type, GSK shares are the most popular buy this week on AJ Bell‘s investment platform. Given how fickle investors can be, I don’t put much weight on this. Next week, there’ll be another ‘top of the stocks’. What’s more important from a Foolish perspective is whether this is a solid pick for the long term.

In my opinion, this is the case. While some of the recent momentum may be down to the valuation simply catching up with events, this remains a great defensive option to consider buying for uncertain times.

And I’d say that’s where we are right now.

The post Why is everyone buying GSK shares? appeared first on The Twelfth Magpie.

Post-Haleon demerger, GSK is a cleaner, more predictable business with strong earnings growth drivers in vaccines and HIV.

But the stock is still valued way below many global pharma rivals, so where should it be trading?

Undervalued compared to peers?

GSK looks cheap on key stock measures against its competitors.

Its price-to-earnings ratio of 15 is bottom of this group, which averages 25.2. These firms comprise Merck KGaA at 18.3, Zoetis at 18.7, AstraZeneca at 30.7, and CSL at 33. So it looks very cheap on this basis.

It also looks a bargain on its 2.6 price-to-sales ratio, compared to its peer group average of 4. And the same is true of its 5.2 price-to-book ratio against its competitor average of 6.4.

‘Correct’ price?

Discounted cash flow (DCF) analysis identifies the price at which any stock should trade based on the underlying business’s fundamentals. It does this by projecting a firm’s future cash flows and ‘discounting’ them back to today.

Some analysts’ DCF modelling is more conservative than mine — depending on the variables used. However, based on my DCF assumptions — including a 7.2% discount rate — GSK shares are 54% undervalued at their current £21.68 price.

So, this implies a ‘fair value’ for the stock of around £47.13 — more than double where it trades now.

The difference between any stock’s price and its fair value is crucial for long-term investors’ profits. This is because share prices tend to converge to their fair value over time.

So the price-to-value gap for GSK shares suggests a potentially terrific buying opportunity to consider today if those DCF assumptions prove accurate.

Earnings growth drivers

The key to long-term gains on any company’s share price (and dividends) is sustained growth in earnings (‘profits’). A risk to GSK is any failure in one of its key products that could lead to litigation. Another is intense competition in the vaccines sector, which could squeeze its margins.

Nevertheless, analysts forecast its earnings will grow a solid 6% a year on average over the medium term at minimum. And this looks well supported by its recent results.

Core operating profit increased 7% year on year to £9.8bn, underpinned by disciplined cost control and improved mix. Core earnings per share climbed 8% to 172p, highlighting the benefits of GSK’s sharper post‑demerger focus. And turnover rose 4% year on year to £32.7bn, reflecting continued strength in vaccines and speciality medicines.

Together, these results underline operational momentum that should continue to drive earnings growth ahead.

My investment view

What makes GSK compelling to me is the blend of stability and potential, which is why I will buy more soon. In short, it is not just a business with reliable earnings but also catalysts that could drive a meaningful re‑rating.

Investors rarely get the chance to buy a global pharma at a price that assumes so little future progress. And with the company’s vaccines, HIV, and pipeline execution, the wider market will also have to reassess its valuation soon.

The post GSK’s share price is under £22, but with a ‘fair value’ much higher, is it time for me to buy more right now?  appeared first on The Twelfth Magpie.

At the heart of this renewed pessimism stands the Iran war, which is triggering an energy inflation shock due to the disruption of the flow of oil & gas through the Strait of Hormuz. As such, most central banks have hit pause on their interest rate cutting policies, economic growth forecasts have been slashed, while recession probabilities from institutional analysts are being revised upwards.

With all that in mind, it might sound like a good idea to stay on the sidelines and wait for a market crash to happen before investing any money. But in practice, this might be a critical and costly mistake. Here’s why.

Time in the market vs timing the market

In the short term, the stock market is near-impossible to predict. Unexpected catalysts for rallies and sell-offs can emerge without warning, and it’s why trying to time the market is almost always a losing endeavour.

All too often, investors waiting for disaster to strike often miss the bottom and end up buying shares at higher prices after the recovery has begun.

Looking at the data, analysts have discovered that missing just 10 of the best trading days by trying to time the market would have cut a portfolio’s return in half over the last 30 years. And since the best days are always clustered around the worst, investors who are trying to perfectly time the bottom are at serious risk of missing out.

Instead, the evidence overwhelmingly supports holding through stock market storms and using the volatility to buy more shares at a discount.

Buying opportunities in 2026

Even with higher levels of uncertainty, several UK stocks remain high-conviction picks among institutional investors in April. And among these stands GSK (LSE:GSK) – the UK’s second largest pharmaceutical giant.

In 2025, GSK beat analyst forecasts on almost every metric, with pre-tax profits and core earnings per share charging ahead by double digits. But in 2026, this momentum might be set to accelerate even further.

Management anticipates receiving another two major drug approvals from regulators while also aiming to kick-start 10 new pivotal clinical trials and provide updates for five ongoing major trials as well.

In other words, the business has a lot of potential growth catalysts scattered throughout 2026. And while higher energy costs and economic weakness do create some potential headwinds, healthcare demand’s notoriously resilient to recessions.

That’s why, despite all the recent stock market uncertainty, GSK shares are actually up more than 16% since the start of the year. And according to some institutional analysts, the pharma giant may have further to climb.

Of course, that doesn’t mean GSK’s a risk-free investment. Clinical trial updates aren’t always positive, and regulatory approvals can be fickle. At the same time, with several blockbuster drugs losing their patent protection in the coming years, GSK’s momentum might start to slow.

These are all crucial risks for investors to consider carefully. But for those looking for opportunities to deploy capital in the stock market today, GSK is nonetheless worth a closer look, in my opinion.

The post Waiting for a stock market crash? Don’t make this fatal mistake! appeared first on The Twelfth Magpie.

Those who can invest their ISA allowance early in the tax year give themselves a valuable head start. Time in the market matters. The longer the money is invested, the more chance it has to grow and compound.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

New figures from Vanguard underline this. An investor putting £20,000 into a spread of global shares at the start of each tax year over the past decade would have £393,102 today. Waiting until the final day of each tax year would have produced £349,234. That £44,000 shortfall is purely down to lost time in the market. Each contribution had less opportunity to grow, and that shortfall compounds over time.

Early-bird investing pays

Let’s say an investor uses their full £20k allowance on the first date of the tax year, for 20 years. I know most of us can’t afford to do that, but the results are stunning for those who can. Assuming an average annual compound total return of 8% a year (not guaranteed, of course), they’d end up with £988,458.

If their pot was invested in FTSE 100 dividend stocks producing an average yield of 5% a year, they’d generate a stunning £49,423 a year income. Better still, that doesn’t eat into the original capital, leaving it intact and still growing.

GSK shares are flying

Pharmaceuticals giant GSK (LSE: GSK) is one FTSE 100 stock that’s worked well for me lately. After a lengthy rebuilding phase, the business has regained momentum. The share price is up more than 70% over the last year and has even climbed 6% in the past month, despite Middle East tensions.

It’s not quite as cheap as it was when I bought it in 2024. Back then, the price-to-earnings ratio was around eight. Today, it’s edged up to 12.7. But that still looks reasonable for a global healthcare name with improving prospects. As the share price has climbed, the yield has eased back to around 3%. That’s lower than before, but still offers a steady stream of income alongside potential growth.

As always, there are risks to consider. Drug development is expensive and uncertain, and may ultimately lead to nothing. Tariffs, tight government budgets and class action lawsuits can all hit the bottom line. Share price growth may ease up from here, but GSK strikes me as a dependable long-term holding.

Building the stream

No investor should base their retirement on a single dividend income stock. It’s essential to have a diversified spread of shares, across different sectors. There are plenty of established names across the FTSE 100 and FTSE 250 offering yields of 5%, 6% or even 7% today. Many look great value after recent volatility. The earlier investors start, the better. However, those who don’t have large sums of cash handy will find drip-feeding money into the market pays off too.

The post Here’s how a £20,000 ISA could be the starting point for a £50k annual passive income appeared first on The Twelfth Magpie.