Pfizer isn’t new to the limelight. The company’s stock is included in dozens of health care, pharmaceutical, and dividend index funds and ETFs, and Pfizer regularly makes headlines for its innovations in health care. However, when its virus vaccine was given emergency use authorization by the U.S. Food and Drug Administration in December 2020, it gained renewed interest.
Pfizer is considered a large-cap value company, suggesting it may not see the rapid growth of, say, a relatively new tech company. However, Pfizer offers a strong dividend that has increased since mid-2009, and in 2020, its stock price was less volatile than most of its competitors.
Over the past few months, Pfizer has been trading at a relatively cheap valuation. After hovering at a forward price-to-earnings ratio of about 13 for much of the last year, the stock currently trades at a forward P/E of just 10.88. Analysts’ consensus estimate for Pfizer’s earnings per share (EPS) this year is $3.68. Multiplying consensus EPS by a P/E of 13, in line with the company’s historical average.
The company reported strong Q1 earnings earlier in May that included $14.6 billion in revenues, representing 42% operational growth. There’s also a lot to like about Pfizer’s 3.92% dividend yield, supported by steady cash flows. The question for potential investors isn’t how Pfizer has performed recently — it’s what might come next and whether the stock is a good fit for your portfolio.
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