How to buy GlaxoSmithKline shares (GSK)

The British pharmaceutical company GlaxoSmithKline has been a reliable dividend stock for many years. With a structural shake up on the way, use this guide to find out if Glaxo's future is bright.
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Updated: Jun 13, 2022
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This guide will give you the lowdown on GlaxoSmithKline, its recent history and news about the future makeup of the company. Read on to find that as well as other key things to look out for.

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How to buy Glaxo stocks, a step-by-step guide

The process of buying shares isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:

  1. Choose a broker. The first thing you need to find is an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
  2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
  3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Glaxo shares.
  4. Place an order for GSK stock. Search for Glaxo’s ticker symbol (GSK) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
  5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Glaxo shares will be listed in your account. Congratulations, you’ve just bought shares in Glaxo!

What is Glaxo? And should I invest?

GlaxoSmithKline (LON: GSK) is a British pharmaceutical company and one of the largest in the world. It’s also one of the largest companies on the London Stock Exchange and recently developed the world’s first malaria vaccine.

At the moment, GSK is made up of a consumer healthcare division and a pharmaceutical division. In 2018, Glaxo and Pfizer agreed to merge their consumer health divisions, and this joint venture will ultimately be spun off and listed as its own independent company. Glaxo’s listing will then comprise the pharmaceutical, research, and development side of the business, while the new venture will focus exclusively on consumer healthcare.

This significant change to the company’s structure means this is an uncertain time to be buying Glaxo. What would normally be a fairly reliable investment, at least in terms of dividend return, is more uncertain as it transitions towards the future. Not only are there more costs associated with building up its consumer healthcare joint venture before spinning it off, but the new pharma-focused GSK will also be small relative to the competition and potentially a takeover target. 

How has the company performed in recent years?

Glaxo’s underperformance compared to the rest of the pharmaceutical industry – most notably local rival AstraZeneca – is a clue to why it is making such bold structural changes. Despite (or perhaps because of) maintaining a stable dividend for five years in a row from 2015, it trailed the rest of the sector by almost 60% in growth terms. Its spotty innovation, combined with new generic competition for its successful treatments thanks to a loss of patent protection and investor concerns over the entire business structure drove mediocre performance in recent years.

In 2018 GSK hit an 18 month low after warning it couldn’t commit to long term dividend stability, with a chunk of its profits going into shareholder payouts. Its subsequent moves to establish a joint venture with Pfizer and respond to concerns about its structure by choosing to focus on research and development helped its price rebound significantly. 

Between 2018 and the onset of the coronavirus, GSK performed reasonably well. It invested heavily in oncology in particular and more generally by spending billions to acquire companies with promising innovative drugs in the pipeline. COVID-19, however, shook the whole market and moved the biotech industry to focus exclusively on a vaccine, while disrupting vaccine rollouts for other diseases. GSK struggled to keep up with competitors who showed more positive results in coronavirus vaccine trials, even being forced to delay their own until the end of 2021. All of which meant the stock hit a 3-year low of 1330p at the end of 2020.

Is it a good time to buy Glaxo shares now?

It depends, as the most important thing to consider is the future split of the company and the fact it will ultimately be two very different businesses. While consumer healthcare is fairly resistant to changes in the market and less susceptible to price pressure as well as the development of generic competitors, research can be more uncertain. It is possible however that the focus on vaccines as a result of the coronavirus and an increasing desire to be prepared in the future could benefit Glaxo in the long run.

Glaxo has proven to be a stable investment in the past, where long term dividend investors have been able to expect a reliable return. The timing of its split combined with the coronavirus pandemic pushing a lot of other vaccine development into the background means more uncertainty until that research is resumed in earnest.

Long term investors will want to look for signs of a strong research and development department, with positive news that improves Glaxo’s reputation for creating reliable vaccines. Vaccines also could provide an opportunity for short-term wins for investors who buy at the right time, although that strategy is risky given the number of regulatory hurdles new medicines have to clear before being approved. 

For either approach, the performance of Glaxo’s R&D department is key as it is going to be the main driver of the stock once the consumer healthcare division becomes its own separate entity. You can find all the latest news on that joint venture as well as the rest of our market analysis below.

Shares of Sanofi (EPA: SAN) gained around 1% today after the UK government agreed to buy $500 million worth of COVID-19 vaccines from Sanofi and GlaxoSmithKline (LON: GLK). Moreover, the French giant raised its 2020 earnings forecast today.  Fundamental analysis: Earnings forecast upgraded  Sanofi, the world’s fifth-largest pharma…

Buying, selling and trading Glaxo shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before you start.

  1. Research the company. You should always examine the fundamentals of a company before buying its stock. What is Glaxo? How did the company get its start? How did it grow? Is Glaxo’s revenue and profit growth picking up? Is the company innovating? The more you know about Glaxo, the better positioned you’ll be to make smart investment decisions.
  2. Make sure you understand the basics of stock investing. Before getting involved in buying stocks, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
  3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
  4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
  5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. We’ve reviewed the brokers out there to help you find the right platform for you.
  6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Glaxo shares. Here’s a quick run-through of what’s involved in each.

Buying Glaxo

This process involves finding a broker and placing an order for Glaxo stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling Glaxo

When you sell any Glaxo shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might want to hold stocks for a long time, hoping to benefit from the company growing steadily throughout. Or, if you see that Glaxo’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading Glaxo

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Glaxo shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

  • Can build wealth over time to achieve financial goals
  • Don’t need to be very reactive to short-term market movements
  • Some stocks will give you an income through regular dividend payments

Cons

  • Takes a long time to realise any profits
  • Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into GSK shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

  • Can generate fast profits if you read the market right 
  • Some platforms allow you to trade with leverage
  • Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

  • Trading with leverage is risky and can lead to big losses
  • Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed. 

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

  • Range of stocks available. The most important thing is that you can actually use the broker to buy the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade forex, cryptocurrency or commodities assets.
  • Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
  • Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
  • Payment methods available. You might want to fund your account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
  • Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
  • Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.

Latest GlaxoSmithKline news

Shares of GlaxoSmithKline plc (LON: GSK) are up 3.0% on Wednesday after the pharmaceutical giant reported better-than-expected Q1 results on strong COVID-19 vaccine sales. GSK Q1 financial highlights At £9.80 billion ($12.3 billion), revenue was up 32% year-over-year.Adjusted per-share earnings jumped 43% YoY to 32.8 pence.Analysts…
Sierra Oncology (NASDAQ: SRRA) shares traded significantly higher after announcing the acquisition by GlaxoSmithKline PLC (LON: GSK) for $55 a share in cash. That represents a total equity value of $1.9 billion, attributed mainly to SRRA’s Momelotinib, a differentiated mode of action with inhibitory activity and critical…
GlaxoSmithKline PLC (LON:GSK) is definitely a fundamentally endowed company. That said, investors cannot buy-in at any price. Investors need to learn how to read the market triggers for GSK. This analysis shows some of the key indicators that tell you when to buy and when to…
Shares of Unilever plc (LON: ULVR) slid 4.0% on Monday after the British multinational said it was still interested in buying GlaxoSmithKline plc’s (LON: GSK) consumer business. GSK continues to reject Unilever’s proposals So far, GSK has rejected three of Unilever’s proposals, including the most recent one that…
Britain’s GlaxoSmithKline plc (LON: GSK) announced in a joint statement with the U.S. based Vir Biotechnology Inc (NASDAQ: VIR) on Wednesday that the U.S. government had agreed to buy about $1.0 billion worth of their antibody-based COVID-19 treatment. U.S. wants GSK to deliver the doses by December 17th…

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.