Dividend Policy: Committed to return at least 80p per share annually until free-cash-flow cover reaches 1.25 to 1.5 times. Then, dividends will be increased in line with cash flows.
Yield: 5.14 per cent.
Payment: Quarterly, declared in sterling.
Last cut: From its formation in 2000 until 2014, GSK paid a gradually increasing dividend. Since then the payout has remained flat at 80p.
Over the past few years, GlaxoSmithKline’s (GSK) cash-flow statement and balance sheet have raised red flags for income investors. Net debt climbed above two-times adjusted cash profit (Ebitda) in both 2016 and 2017, while free cash flow hasn’t covered total shareholder returns since 2011. And amid all this worry, management took the bizarre decision to compete for Pfizer’s $20bn (£15bn) consumer health division earlier this year – a deal that could have stretched the debt pile to more than £30bn. It’s no wonder shares in the pharma giant crashed to a five-year low of 1,235p in February.