As the economy recovers from the COVID-19 pandemic, concerns over rising inflation driven by increasing consumer spending are causing significant volatility in the stock market. President Biden’s proposed global minimum corporate tax rate of 15% is also being viewed skeptically by some investors.
Against this backdrop, investors are turning to dividend yielding stocks to hedge their portfolios against market volatility by ensuring a steady stream of income. Investors’ interest in the dividend stocks is evident in SPDR S&P Dividend ETF’s (SDY) 18.7% returns over the past six months.
So, it could now be wise to scoop up the shares of GlaxoSmithKline plc (GSK) and Mobile TeleSystems Public Joint Stock Company (MBT) based on their fundamental strength and attractive dividends. Their current dividend payouts yield more than 5%.
GlaxoSmithKline plc (GSK)
Based in Brentford in the United Kingdom, healthcare company GSK operates through two segments: Pharmaceuticals and Vaccines. The company’s main research areas include respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, vaccines, immuno-inflammation, oncology and rare diseases.
GSK and Vir Biotechnology, Inc. (VIR) announced on May 27that the U.S. Food and Drug Administration (FDA) granted an Emergency Use Authorization (EUA) for sotrovimab, a therapeutic that can be used for the treatment of mild-to-moderate COVID-19 in high-risk adults and pediatric patients. Success with sotrovimab is expected to boost the company’s growth in the near- to midterm.
The company began paying dividends in 1995. Over the last three years, GSKL’s dividend payout has grown at a 0.05% CAGR. While GSK’s four-year average dividend yield is 5.41%, its current dividend translates to a 5.61% yield. GSK is expected to pay a quarterly dividend of 19 pence per share on July 8, 2021.
GSK’s operating profit from its Total Pharmaceutical segment increased 2% year-over-year to £1.12 billion ($1.58 billion) for the first quarter, ended March 31, 2021. Its respiratory pharmaceuticals turnover grew 24% year-over-year to £619 million ($877.93 million), driven primarily by growth in Trelegy and Nucala sales.
Analysts expect GSK’s EPS to increase 28.3% year-over-year to $0.59 for the current quarter, ending June 30. Its revenue is expected to increase 10% year-over-year to $12.27 billion for the quarter ending September 30, 2021. The stock has gained 13.7% over the past three months to close yesterday’s trading session at $38.35.
It’s no surprise that GSK has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has an A grade for Value, and a B grade for Stability. Click here to see GSK’s ratings for Quality, Growth, Sentiment and Momentum. GSK is ranked #27 of 229 stocks in the Medical – Pharmaceuticals industry.
Mobile TeleSystems Public Joint Stock Company (MBT)
MBT is headquartered in Moscow and is a subsidiary of Sistema Public Joint-Stock Financial Corporation. It offers voice and data transmission, internet access, broadband, pay TV, and various value-added services through wireless and fixed lines. It also provides financial and integration services, as well as selling equipment, accessories, and software.
On April 20, 2021, MBT launched KION, an over-the-top (OTT) video streaming platform for mobile devices and smart TVs. The company’s President & CEO Vyacheslav Nikolaev said, “Launching an online streaming platform under a new brand is a major milestone for MTS as well as a strategic step forward.” The product is expected to expand MBT’s market reach.
The company began paying dividends in 2002. While the four-year average dividend yield for MBT is 11.22%, its current dividend translates to a 7.13% yield.
MBT’s revenue increased 5.5% year-over-year to RUB123.9 billion ($1.69 billion) for the first quarter, ended March 31, 2021. Its operating profit grew 6.3% year-over-year to RUB28.60 billion ($390.59 million), while its adjusted OIBDA increased 6.7% year-over-year to RUB55.40 billion ($756.60 million). The company’s cash increased 45.1% year-over-year to RUB 29.30 billion ($400.15 million).
For the current quarter, ending June 30, 2021, analysts expect MBT’s EPS and revenue to increase 200% and 13.4%, respectively, year-over-year to $0.27 and $1.73 billion. The stock has rallied 8.3% over the past three months to close yesterday’s trading session at $9.17.
MBT’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system.
The stock has a B grade for Value, Stability and Quality. Within the B-rated Telecom – Foreign industry, it is ranked #15 of 52 stocks. To see the additional POWR Ratings for MBT (Growth, Momentum and Sentiment), click here.
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GSK shares were trading at $38.52 per share on Wednesday morning, up $0.17 (+0.44%). Year-to-date, GSK has gained 7.97%, versus a 12.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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