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Highlights
- Amid the rising economic uncertainty, investors have been choosing defensive stocks, like drugs and tobacco, over cyclical stocks, like airlines, restaurants, and luxury clothing.
- Safe haven investing is gaining popularity as investors are trying to make the maximum possible gains amid the current economic turmoil.
Amid the rising economic uncertainty, investors have been looking for safer equity investments lately, placing the biggest bets on pharma and tobacco stocks. The investments in pharma and tobacco stocks have recently been on their highest levels since the 2008 global financial crisis. Safe haven investing is gaining popularity as investors are trying to make the maximum possible gains amid the current economic turmoil.
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With inflation and interest rates touching record high levels, the UK economy may even be headed towards a recession, as per several analysts. Still dealing with the impact of the Covid-19 pandemic and Brexit, the UK’s recovery was struck again due to the escalation of the Russia-Ukraine war. All these factors together have led to a shift in the preference of investors from cyclical stocks like airlines, restaurants, and luxury clothing to safer stocks like drugmakers and tobacco.
The ongoing move of going away from cyclical stocks towards defensive stocks is now at the same peak as it was during the Lehman Brothers crash. Let’s look at some of the defensive pharma and tobacco stocks that UK investors can keep an eye on.
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- AstraZeneca plc (LON: AZN)
The shares of the pharmaceutical and biotechnology firm, AstraZeneca plc, were down by 1.26% at 11:33 AM (GMT+1) on 9 May 2022, at GBX 10,174.00. With a market cap of £159,935.67 million, the FTSE 100 company has provided its shareholders with a return of 31.61% over the last one year as of 9 May 2022. The company is currently offering a dividend yield of 2.2% a year.
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- GlaxoSmithKline plc (LON: GSK)
The shares of the leading British pharma business, GlaxoSmithKline plc, were down by 0.94% at 11:37 AM (GMT+1) on 9 May 2022, at GBX 1,752.00. With a market cap of £89,935.51 million, the FTSE 100 company has provided its shareholders with a return of 29.25% over the last one year as of 9 May 2022. The company is currently offering a dividend yield of 4.2% a year.
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- British American Tobacco plc (LON: BATS)
The shares of the leading cigarettes manufacturer, British American Tobacco plc, were up by 0.50% at 11:39 AM (GMT+1) on 9 May 2022, at GBX 3,316.50. With a market cap of £75,063.79 million, the FTSE 100 company has provided its shareholders with a return of 16.75% over the last one year as of 9 May 2022. The company is currently offering a dividend yield of 6.5% a year.
- Imperial Brands plc (LON: IMB)
The shares of the British tobacco business, Imperial Brands plc, were down by 0.03% at 11:41 AM (GMT+1) on 9 May 2022, at GBX 1,657.00. With a market cap of £15,753.01 million, the FTSE 100 company has provided its shareholders with a return of 3.37% over the last one year as of 9 May 2022. The company is currently offering a dividend yield of 8.4% a year.
