first_img Anna Sokolidou | Tuesday, 7th July, 2020 | More on: GSK See all posts by Anna Sokolidou Forget Cash ISAs. I’d buy this FTSE 100 company instead Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!center_img “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images. Anna Sokolidou has no position in any of the companies mentioned in this article. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. I think GlaxoSmithKline (LSE:GSK) is a great FTSE 100 company, but the share price hasn’t had a great year. In fact, compared to six months ago, a Cash ISA would have delivered a better return. However, here I’ll explain why GSK is a much better investment than Cash ISAs.  Cash ISAsAs we all know, Cash ISAs are ‘safe’ investments. At the same time, it’s obvious that they don’t offer much in the way of returns. You see, interest rates are near zero, whereas the inflation rate is estimated to average 1.19% in 2020. This means that the banks will pay you negative real interest on Cash ISAs. So your money will, in fact, fall in value over time. Ouch!5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…It seems to me that other assets deserve much more of your attention. The best thing I think novice investors can do is invest in the FTSE 100. On average it returns 6% per year after inflation. Not bad! But there’s one way of outperforming the broader market. You can do it by choosing high-performing companies. And I really like GlaxoSmithKline.Why GlaxoSmithKline?First of all, I fully agree with my colleague Peter Stephens who likes GSK too. The pharmaceutical giant may be down this year but it has great potential for growth in good times and bad. As I’ve mentioned before, healthcare is not a cyclical industry. We all want to stay healthy. So drugs are the last thing we all scrimp on. But which pharma players should we choose? Well, the two largest healthcare companies listed on the LSE are AstraZeneca and GSK. I feel it is generally much safer to choose large companies with a long operational history.Both of these companies have particular topical interest now too and as they’re aiming to develop and test a coronavirus vaccine. GSK has formed a partnership with France’s Sanofi on this front.So why do I like GSK rather than AZN? If we take GSK’s current share price and divide it by the FTSE 100 firm’s 2019 total earnings per share, we’ll get a price-to-earnings (P/E) ratio of 17.2. This is quite a good P/E, especially if we compare it to AstraZeneca’s ratio of over 100. Moreover, GlaxoSmithKline’s dividend yield of 5% also beats AstraZeneca’s 2.5% yield and the FTSE 100’s average of 4%. And how about GlaxoSmithKline’s financial health? Well, according to Moody’s, GSK’s A2 high investment grade credit rating reflects the company’s large size and a diversified product portfolio.The company is exposed to few patent expiries apart from Advair, which makes future earnings fairly predictable. Moody’s also sees the pipeline improving following the acquisition of Tesaro, a company specialising in oncology drugs.And while GSK not considering increasing the dividend until cover reaches at least 1.25 times might seem bad news for shareholders, this is good news for the balance sheet and cash position following the Tesaro acquisition.But on the downside, the credit rating agency predicts operating margins could stay under pressure on declining sales of Advair in the US due to generic competition. This is what I’d doOverall, given the company’s initiatives and its product portfolio, Moody’s considers GSK’s financial position to be sound. I’d also call its stock a bargain and would be happy to buy.  I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.last_img

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