I love a CEO who tells it straight. Not only is it nice to have transparency, but such people tend to be a little more cocky, which is a nice thing to have in a leader.

GlaxoSmithKline's (NYSE:GSK) Andrew Witty's message to shareholders: We're in better shape than much of the rest of the industry because we've got cash -- $9.2 billion to be exact.

And while investors have knocked down Glaxo's stock a lot in the last 18 months, the company isn't hurting nearly as much as everyone else -- especially the little guys. So Glaxo isn't going to use its cash to buy back stock, but instead look for strategic acquisitions.

Sounds good to me.

This isn't anything new. Glaxo has made plenty of acquisitions over the years including a recent acquisition of Bristol-Myers Squibb's (NYSE:BMY) Egyptian assets. The company also has partnerships with 16 different companies including Alnylam Pharmaceuticals' (NASDAQ:ALNY) and Isis Pharmaceuticals' (NASDAQ:ISIS) joint venture Regulus Therapeutics and Exelixis (NASDAQ:EXEL). Glaxo has set up many of these deals as options where it can pick and choose between drug candidates and doesn't risk a lot if the drugs fail.

Of course, it doesn't always exercise those options, having turned away from the remainder of Exelixis' pipeline just today. On the other hand, Witty did say that small drug companies have been approaching Glaxo to discuss being acquired.

Glaxo of course needs partnerships like the above to pay off since it's been essentially treading water for a while now. Revenue was up 7% year over year, but that was entirely due to the falling pound. At constant currency, revenue fell 3% from the year-ago quarter.

The problem is that many of the drugs that Glaxo sells in the U.S. are now facing generic competition -- blood pressure drug Coreg, epilepsy treatment Lamictal, and anti-depressant Wellbutrin all saw sales cut in half. Add to that continuing falling sales of Avandia, as diabetics shun the potential heart problems for apparently safer alternatives like Takeda's Actos and Merck's (NYSE:MRK) Januvia and Glaxo, and investors should be happy that adjusted earnings per share were up 4%.

At this point treading water seems like a good thing. Investors can collect their 5.7% dividend check while they wait for Glaxo's partnerships to develop.

Glaxo is an Income Investor recommendation. To see how dividend-paying stocks can offer both secure income and the opportunity for growth, take a free look at this newsletter with a 30-day free trial. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of Exelixis, which is a Rule Breakers pick. The Fool has a disclosure policy.