If you are not familiar with Pfizer Inc., the company develops, manufactures, and sells healthcare products worldwide. The company is responsible for the vaccine for the Covid-19 virus. The company's stock price has fallen by 7%, from the $37-38 range to the current $34.72 close on February 13, 2021. I am thrilled when I see a company I like to go down in value. This allows me to purchase more shares of the company at a discount price. This article will explain why I am purchasing more Pfizer Inc. (Ticker: PFE) stocks into my portfolio. Moreover, I believe the fallen price is an excellent opportunity for me to get a great bargain for shares of the company.
Pfizer Inc. (Ticker: PFE) is currently yielding a dividend yield of 4.50%. This dividend rate is quite compelling for dividend investors like me. The dividend yield appears to be very safe since the dividend payout ratio is 46.42%, which is considered very low. A low payout ratio shows that the company can pay its dividends to the investor and maybe increase it towards the future. At the current P/E ratio of 12.85, investors are buying at an effective yield of 7.8%, and the dividend yield takes 4.5% percentage points of that yield. A well-covered dividend yield of 4.5% plus 3% EPS growth adds up to 7 to 8% total return, provided the P/E ratio remains at the current level. Also, the current P/E ratio is below historic levels. This provides upside potential for total return. Pfizer Inc. provides a great addition to my dividend-paying portfolio.
Pfizer Inc. (Ticker:
PFE) is responsible for the upcoming Covid-19 vaccine, which is excellent news
for the company. Pfizer Inc. has been much in the news as the firm announced
and then started distributing its Covid-19 vaccine.
The stock price has
declined, and the stock price's mispricing is an excellent indicator for me to
invest in this company. It seems Mr. Market has such a modest valuation on a
company that should be very attractive in market conditions. I am always
looking for great value when investing in the stock market and believe Pfizer
Inc. is a stock that comes to my radar.
I am confident that
even without the Covid-19 vaccine; Pfizer Inc. is still a great company that
generates solid free cash flow. The trailing P/E is only 28.08,
and the forward P/E is extremely low at 13.36. Moreover,
the company is very profitable; generating a return on equity of 10.88%,
and the profit margin is fantastic at 79.54%. The other
company in the news for a competitor vaccine, AstraZeneca (Ticker: AZN), is
trading at 66 times, Merck's
(Ticker: MRK) normalized P/E is 18x,
and Denmark's Novo Nordisk (Ticker: NVO) trades at 23 times.
Pfizer Inc.'s stock price is not priced correctly and can be a potential investment for investors looking for value and dividend payment to their portfolio. The company's current valuation is the lowest compared to its competitors.
Bottom
Line
Pfizer Inc. (Ticker:
PFE) is looking more attractive now than at any other time in the past few
years, with a new, growing, and balanced drugs portfolio, reasonable financial
flexibility, high dividend yield, and with the cherry on the cake of the
Covid-19 vaccine.
Pfizer Inc. (Ticker: PFE) stock is my top holding in my dividend growth portfolio. The decline in the stock price does not affect my view of this company. I like it when a company I like goes down in price. This allows me to add more positions of the company into my portfolio. I will buy more shares of Pfizer Inc. (Ticker: PFE) with the $2,000 monthly contribution and dividend income I am going to receive. I hope the stock price continues to decline further to buy more shares of this company at a bargain.
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