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Jan. 8, 2021, 9:00 a.m. EST

AstraZeneca has scope to increase dividend by 25%, key broker says, as broader FTSE 100 edges lower

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By Steve Goldstein

Anglo-Swedish pharmaceutical AstraZeneca has scope to increase its dividend by 25%, a key broker said on Friday.

AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN -0.93% /zigman2/quotes/200304487/composite AZN -1.08% can increase its dividend to about $3.50 per share next year, said analysts at Bank of America, which would give the maker of the COVID-19 vaccine a 3.5% yield. That would make the stock appealing to U.K. income investors, and contrasts with rival drug company GlaxoSmithKline /zigman2/quotes/200381158/delayed UK:GSK -2.07% /zigman2/quotes/209463850/composite GSK -2.24% , where the yield is set to fall to around 3% to 4%, from 6% currently, after its consumer health unit is spun off.

Bank of America’s new view toward AstraZeneca is due to its agreed buyout of Alexion Pharmaceuticals, which is expected to close in the third quarter. AstraZeneca, at about 14 times 2022 earnings per share, is trading in line with other European pharmaceuticals, despite having a better growth outlook and many drugs in the pipeline, Bank of America said.

AstraZeneca slipped 0.5% and Glaxo eased 0.6%.

The broader FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -2.53% eased 0.2%, underperforming its European rivals /zigman2/quotes/210599654/delayed XX:SXXP -1.64% . Losses for consumer-products maker Unilever /zigman2/quotes/205449809/delayed UK:ULVR -2.30% , banking giant HSBC Holdings /zigman2/quotes/203901799/delayed UK:HSBA -2.06% , and mobile-phone operator Vodafone /zigman2/quotes/202484985/delayed UK:VOD -2.15% weighed on the index.

Barratt Developments’ /zigman2/quotes/209812640/delayed UK:BDEV -2.03% shares rose 4% as the home builder said it would resume dividends after first-half sales rose 12%. “The increased volume profile combined with some more house price inflation also bode well for better margins over the next 12-18 months,” said analysts at Peel Hunt.

/zigman2/quotes/203048482/delayed
UK : U.K.: London
6,945.00 p
-65.00 -0.93%
Volume: 3.05M
Feb. 26, 2021 4:35p
P/E Ratio
36.66
Dividend Yield
2.98%
Market Cap
£91.17 billion
Rev. per Employee
£272,751
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/zigman2/quotes/200304487/composite
US : U.S.: Nasdaq
$ 48.38
-0.53 -1.08%
Volume: 8.55M
Feb. 26, 2021 4:00p
P/E Ratio
39.47
Dividend Yield
2.83%
Market Cap
$127.46 billion
Rev. per Employee
$352,484
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/zigman2/quotes/200381158/delayed
UK : U.K.: London
1,190.80 p
-25.20 -2.07%
Volume: 11.26M
Feb. 26, 2021 4:35p
P/E Ratio
10.41
Dividend Yield
6.72%
Market Cap
£59.47 billion
Rev. per Employee
N/A
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/zigman2/quotes/209463850/composite
US : U.S.: NYSE
$ 33.61
-0.77 -2.24%
Volume: 7.64M
Feb. 26, 2021 4:00p
P/E Ratio
11.56
Dividend Yield
5.95%
Market Cap
$83.15 billion
Rev. per Employee
N/A
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,483.43
-168.53 -2.53%
Volume: 1.25M
Feb. 26, 2021 4:56p
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/zigman2/quotes/210599654/delayed
XX : STOXX
404.99
-6.74 -1.64%
Volume: 0.00
Feb. 26, 2021 11:03p
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/zigman2/quotes/205449809/delayed
UK : U.K.: London
3,733.00 p
-88.00 -2.30%
Volume: 6.41M
Feb. 26, 2021 4:35p
P/E Ratio
19.86
Dividend Yield
3.97%
Market Cap
£97.99 billion
Rev. per Employee
N/A
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/zigman2/quotes/203901799/delayed
UK : U.K.: London
426.20 p
-8.95 -2.06%
Volume: 39.89M
Feb. 26, 2021 4:35p
P/E Ratio
28.43
Dividend Yield
2.52%
Market Cap
£86.81 billion
Rev. per Employee
£257,711
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/zigman2/quotes/202484985/delayed
UK : U.K.: London
122.02 p
-2.68 -2.15%
Volume: 73.71M
Feb. 26, 2021 4:35p
P/E Ratio
15.52
Dividend Yield
6.61%
Market Cap
£32.74 billion
Rev. per Employee
£423,083
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/zigman2/quotes/209812640/delayed
UK : U.K.: London
664.40 p
-13.80 -2.03%
Volume: 4.14M
Feb. 26, 2021 4:35p
P/E Ratio
16.83
Dividend Yield
1.13%
Market Cap
£6.76 billion
Rev. per Employee
£513,779
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