GlaxoSmithKline plc (ADR) (GSK): Is The Stock A Buy, Sell Or A Hold?

Furthermore, under its new operating model, R&D productivity and returns have improved — the company is on target on achieving a 14% return on R&D by 2014 and has a total of 15 new vaccines and medicines it could potentially launch over the next three years.

5. Valuation: GlaxoSmithKline plc (ADR) (NYSE:GSK)’s shares are trading at a trailing price-to-earnings ratio of 14, slightly above its 10-year P/E average of 13 and the sector P/E of 12.5. It also sports a current dividend yield of 5%, twice covered.

My verdict on GlaxoSmithKline
The last few years have been a challenging time for the pharmaceutical industry with the patent expiries and increasing health care regulation, austerity measures, and generic competition weighing down on revenues and profits. Despite weak trading results recently, the outlook for the company remains promising as demand for health care is only going to grow due to an aging global population and the increasing wealth of developing nations. GlaxoSmithKline plc (ADR) (NYSE:GSK) is well positioned to take advantage of these long-term demographic trends with its strong presence in emerging markets, a deep pipeline of products, a much improved R&D, and cost-efficient operations.

So overall, I believe GlaxoSmithKline plc (ADR) (NYSE:GSK) at 1,550 pence looks like a buy.

The article GlaxoSmithKline: Buy, Sell, or Hold? originally appeared on Fool.com is written by Zarr Pacificador .

Zarr Pacificador has no position in any stocks mentioned. The Motley Fool recommends GlaxoSmithKline.

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