GSK vs AstraZeneca Which Should You Buy?

Both GlaxoSmithKline (GSK) and AstraZeneca are prominent pharmaceutical companies, each with a long history of innovation and success in the healthcare sector. However, recent market trends and industry developments have set these two giants on a collision course in the world of stocks. Investors are closely watching as GSK and AstraZeneca vie for dominance in the market, with each company striving to outperform the other and secure a strong position for future growth and profitability.

GSK or AstraZeneca?

When comparing GSK and AstraZeneca, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between GSK and AstraZeneca.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. GSK has a dividend yield of 4.15%, while AstraZeneca has a dividend yield of 2.28%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. GSK reports a 5-year dividend growth of -4.37% year and a payout ratio of 95.58%. On the other hand, AstraZeneca reports a 5-year dividend growth of 0.42% year and a payout ratio of 69.29%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with GSK P/E ratio at 22.95 and AstraZeneca's P/E ratio at 31.19. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. GSK P/B ratio is 4.11 while AstraZeneca's P/B ratio is 5.08.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, GSK has seen a 5-year revenue growth of -0.05%, while AstraZeneca's is 0.70%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GSK's ROE at 18.08% and AstraZeneca's ROE at 16.80%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $36.31 for GSK and $64.70 for AstraZeneca. Over the past year, GSK's prices ranged from $34.29 to $45.93, with a yearly change of 33.95%. AstraZeneca's prices fluctuated between $60.47 and $87.68, with a yearly change of 45.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.