Disappointing revenues and earnings left GlaxoSmithKline (NYSE: GSK) under the weather last year, but two strong divisions are driving the member of our Global Income Edge Conservative Portfolio towards a quick convalescence. The trailing 12-month yield is 5.55%

Although the year ended with revenues down 8% to $9.5 billion and earnings down 12% to $2.9 billion, a recovery is in sight thanks to the strong performance of its HIV unit, ViiV Healthcare, where revenues surged 25% to $709 million.

One of Glaxo’s top performers in 2014, ViiV only accounts for 7.5% of  revenues. Its two main drugs, Tivicay and Triumeq, are expected to gross a combined $4.6 billion by 2018, and Glaxo plans to capitalize on their strong growth.

The company is considering launching an initial public offering of its majority stake in ViiV on the London Stock Exchange in 2016. Glaxo owns about 80% of the unit in a joint venture with Pfizer and Shionogi. The spin-off should net between $18 billion and $27 billion—the largest healthcare IPO on record for that exchange. Glaxo will keep more than 50% of the company after IPO.

Chief executive officer Andrew Witty sees the potential IPO as part of a larger restructuring plan that is expected to shave about $1.5 billion in costs.

In another shot in the arm, this spin-off allows Glaxo to focus on its vaccines business, where earnings should grow substantially once the company completes a $20 billion asset exchange with Novartis later this year.  The exchange will allow Glaxo to beef up its vaccines portfolio with assets from Novartis while divesting some non-core businesses.

In January, Glaxo’s vaccines operation sprang into action, quickly developing and sending an experimental Ebola vaccine to Liberia in response to the outbreak. Also in the pipeline is a shingles vaccine withthe potential to generate $1.4 billion in revenue by 2020. The experimental drug known as HZ/su is currently in Phase III trials and has shown to reduce the risk of shingles in adults age 50 and older by 97%, a far better result  than Merck’s Zostavax, which only has a 70% efficacy.

As a result, UBS analysts recently lifted their recommendation for Glaxo from a “sell” to a “buy”at a target price of12.5 to 17 pound sterling ($19.18 to $26.09) because they expect  substantial earnings growth in the next three to five years

Glaxo will give its earnings outlook for 2015 after the Novartis deal is completed. Meanwhile, there’s nothing anemic about the company’s dividend, which rose 3% to $1.23 per share in 2014, a payout that Witty promised to hold steady this year. He also plans to return the $6.1 billion net proceeds from the Novartis asset-swap to shareholders.

AllianceBernstein’s announces solid dividend; 6.99% annual  rate

Aggressive Portfolio holding AllianceBernstein (NYSE: AB) reported a bump in net income from unit holders in 2014:  $58.11 million compared with $57.85 million the prior year. The company announced it will pay a 57 cent per share quarterly dividend payable March 12 for shareholders on record at Feb 23.

The global asset management firm’s dividend varies, but this is towards the upper end of the range it pays quarterly, and it puts the trailing 12 month yield at 6.88%.

While the net income was higher, because of a higher number of units, earnings per share fell to $0.59 from $0.62. After adjustments for one-time items, EPS came in at $0.57, beating analysts’ estimates of $0.51 per share.

Net revenues rose 3% to $787 million to beat analysts’ estimates of $748.2 million. Although the company made money in U.S. equity and fixed-income markets, which were strong in the fourth quarter, it struggled with declining revenue from the weaker global equity and fixed-income markets.

WEEKLY INCOME TRIVIA QUESTION

Q: What is the equivalent of the “Cheers” toast in Turkey?

The answer will be provided in next week’s issue.

Last week’s question was: The Royal Canadian Mounted Police are known to tourists as “Mounties.” But they have their own nickname for themselves – what is it?

The answer: The “R-C-M-P,” or simply, “The Force.” While they’ll be polite when talking to tourists and outsiders, Mounties don’t use – and even avoid – the term “Mounty” when talking amongst themselves.

Thanks to American influence, young Canadians who live and work in the jurisdiction of the RCMP have taken to calling them “cops,” just like any other police officer. Which is a bit of shame, given the interesting and unique history of this Canadian institution.