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Is this FTSE 100 dividend stock a ‘best buy’ in this stock market crash?

Friday trading was a much more calmer experience for stock pickers than earlier in the week. But don’t expect it to last. A spike in coronavirus infection rates over the weekend could cause stock bourses to plummet again on Monday morning.

In a recent piece I explained why National Grid’s role as the country’s sole power network operator makes it a top FTSE 100 safe haven to load up on today. But in truth Britain’s blue chip index is chock-full of defensive stars like this. Another such share that I think is a top buy for these troubled times is GlaxoSmithKline (LSE: GSK).

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Marvellous medicines

Medicines, like food, running water, and a roof over our heads, is something that we expect in a modern society. Indeed, sales for big pharma companies tend to perform more resolutely in times of social, economic, or political crises like this. The panic selling of shares like Glaxo, then – a business which has lost 13% of its value during the past month – provides a terrific dip buying opportunity.

It’s not just that demand for the Footsie firm’s prescription treatments hold up well despite the Covid-19 outbreak. The rate at which consumer healthcare products are booming across the globe will help protect Glaxo’s bottom line, too. It hopes to spin this division off into a separate company soon, but for the time being the unit creates almost a third of turnover at group level.

Rising infection rates and panicked stockpile-building the world are driving demand for such products. As such, labels like Glaxo’s Panadol and Excedrin painkillers, Otrivin nose unblockers, and Theraflu flu-symptom battlers are likely to be booming right now, too.

But don’t be fooled!

There’s no reason why sales growth (which came in at 10% in 2019) should take a whack following the Covid-19 outbreak then. As I say, income from some of its products could have well received a significant boost more recently. But contrary to some thinking, it’s unlikely that its involvement to create a coronavirus vaccine will supercharge profits.

It’s not just that successfully developing a vaccine with one its partners will prove extremely challenging. Even if it does manage this, the boost to earnings are unlikely to be stratospheric. Buy the business, sure, but not on the back of a possible coronavirus  breakthrough.

Too cheap to miss?

It has to be said that the medical mammoth hasn’t got 2020 off to a flyer. Its share price was already falling before the coronavirus outbreak worsened in late February, reflecting in large part disappointing financials early last month. City analysts are expecting annual earnings at Glaxo to slip 7% in 2020.

I reckon its slipping stock price provides long-term investors an opportunity to nip in and grab a bargain, though. Right now the company carries a forward price-to-earnings (P/E) ratio of 12.5 times. Meanwhile, with brokers anticipating another 80p per share dividend in 2020 it sports a mighty 5.6% dividend yield, too.

If you’re looking for lifeboats during a bleak period for the global economy, this is one FTSE 100 share I think you should buy today.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.