GSK (LSE: GSK) has emerged as a popular passive income stock on ISA platforms through August, appearing in the top 10 most-bought lists alongside financial-sector stalwarts such as Legal & General. The pharmaceutical group’s shares have gained 27% over the past 12 months, putting the current price of 250 shares at £4,705 before charges and stamp duty.
GSK Passive Income Stock: What the Dividend Numbers Show
The forward dividend yield stands at 3.6% for the current year, which will not excite yield hunters. But the trajectory is what matters to long-term holders.
GSK’s full-year 2025 dividend came in at 66p per share, according to the GSK FY 2025 results slides. For 2026, the company expects to pay 70p per share, including a second-quarter dividend of 17p, as disclosed in the Q2 2026 results press release. Analysts forecast dividends to rise by 18.7% between 2025 and 2028.
That progression sits within a dividend policy GSK outlined at its full-year 2025 results. The company said dividends ‘remain an essential component of total shareholder return’ and committed to ‘a progressive dividend policy guided by a 40 to 60 per cent payout ratio through the investment cycle.’
GSK also completed a £2 billion share buyback programme during the period, announced at its FY 2024 results.
Pipeline and Cost Programme Add to the Picture
The income case rests on earnings momentum, not yield alone. For full-year 2025, GSK reported group turnover of £32.7 billion, Core operating profit of £9.8 billion, and Core EPS of 172.0p, up 12% at constant exchange rates, per the FY 2025 results slides.
For 2026, the Q2 2026 press release reaffirmed guidance for turnover growth of 3% to 5% and Core EPS growth of 7% to 9%. Cash generated from operations is targeted at approximately £10 billion for 2026, up from £8.9 billion in 2025, according to the Accelerate Growth results slides.
The longer-term target is more than £40 billion in sales by 2031, with a stable to improving operating margin through the dolutegravir loss-of-exclusivity period of 2028 to 2030.
Dolutegravir products generated £1.4 billion in Q2 2026 sales, with the combination therapy Dovato alone contributing £749 million in the quarter, according to Pharmaceutical Technology. The patent expiry on those products is the central near-term risk to margins.
CEO Luke Miels, who took over from Emma Walmsley in 2026 after his appointment was announced in September 2025, flagged that risk directly at the Q2 results. ‘To fund investment in the late-stage portfolio and R&D, we are starting a 3-year cost savings programme to simplify the organisation and to reallocate capital and resources,’ he said. ‘Savings will primarily be reinvested, with some used to improve margins and profitability in the dolutegravir patent expiry period.’
The programme, called Accelerate Growth, targets £1.9 billion of annual savings fully realised by 2029, at total expected costs of £2.4 billion, of which £2.1 billion is expected to be cash costs, per the Q2 2026 results announcement. GSK plans to establish a new flagship R&D centre at the Cambridge Biomedical Campus as part of the restructuring, according to the Q2 results infographic.
The pipeline underpinning that spending has expanded. GSK had 62 assets in clinical development at Q2, with more than 20 Phase III trial starts now expected in 2026, up from a prior forecast of 10, across oncology, respiratory, hepatology and vaccines.
The Haleon demerger in July 2022 reset the dividend base and the business model. That consumer healthcare separation left GSK as a pure pharmaceuticals and vaccines group with a leaner cost structure. The subsequent earnings recovery and progressive dividend policy suggest the restructuring is delivering.
For income investors with a horizon stretching past 2030, the combination of rising dividends, a £10 billion cash generation target for the current year, and a phase III pipeline expanding at pace makes the 3.6% yield look less like a ceiling and more like a floor. The test will come when dolutegravir patents expire: whether the Accelerate Growth savings land on schedule will determine whether that £1.9 billion target translates into dividend growth or merely offsets the revenue gap.
