According to data from AJ Bell, UK investors have been buying a pretty eclectic mix of FTSE 100 stocks to start the year. In the month to 25 January, the most popular shares were GSK (LSE:GSK), National Grid, Rolls-Royce, Legal & General, and BAE Systems.
These span different sectors, namely healthcare, utilities, financials, and industrials (aerospace and defence). Rolls-Royce and BAE are hardly surprising, as they’re part of the booming European aerospace and defence sector.
Meanwhile, Legal & General is a firm favourite due to its generous 8%+ dividend yield. And National Grid is probably on there for a similar reason, with its presence likely boosted by dividend reinvestment plans (it paid its interim dividend in mid-January).
GSK also paid a dividend earlier in January. However, I suspect investors are not only buying it for income, but also a potential turnaround at the vaccine maker. It was highlighted as one of four “noteworthy stocks for 2026” by AJ Bell back in December.
What’s going on at GSK?
The GSK share price has notoriously lagged the FTSE 100 for decades. However, it’s up 29.4% over the past six months and is therefore enjoying a fair bit of momentum.
One catalyst appears to be the appointment of new CEO Luke Miels, who has a lot of industry experience. Since this leadership transition was announced in September, the stock has jumped nearly 20%.
That said, he’s more of a continuity pick, having previously been chief commercial officer. He’s tasked with delivering shareholder value through a “strong focus on pipeline delivery, exceeding the 2031 outlooks, and preparing for the next wave of R&D through ambitious adoption of technology and championing of exceptional patient outcomes“.
The pipeline got a boost earlier in January when GSK announced positive Phase III results for bepirovirsen, a potential first-in-class treatment for chronic hepatitis B. Over 250m people worldwide have this virus and it’s the leading cause of liver cancer.
So this could position GSK as a leader in a large untapped market. The firm also stuck a deal to snap up Rapt Therapeutics recently for $2.2bn. This gives it a potential treatment for severe food allergies.
Is the stock worth considering?
GSK is seen as a defensive stock, as demand for medicines doesn’t disappear in recessions. With rising fears about an AI bubble, as well as ongoing geopolitical and tariff uncertainty, investors might see it as a solid, defensive portfolio choice.
That especially so as the stock is cheap, trading at just 10 times forward earnings while offering a well-covered 3.8% dividend yield. GSK also has a large pipeline, with over 60 drugs undergoing clinical trials.
Not all these will succeed, of course, and the patents for its top-selling HIV dolutegravir products are set to expire in mid-2028. Therefore, it’s imperative the firm’s pipeline starts bearing fruit over the next couple of years.
Also, vaccine makers are facing a very uncertain US environment. It’s unlikely vaccines will be a growth area there under the current administration.
For investors looking for a cheap defensive, dividend-paying stock with turnaround potential, GSK could be worth considering.
Personally though, it’s not on my own list of FTSE 100 stocks to buy right now due to the vaccine and pipeline uncertainty.
