Shares of Pfizer Inc. (NYSE: PFE) experienced a notable increase of 2.24% on Wednesday, with moderate trading volume. This surge comes as a surprise amid a general decline in major U.S. stock indices.
What’s the reason behind Pfizer’s resilience today? Earlier today, The Wall Street Journal released a column questioning whether investors have become overly pessimistic about COVID-19 vaccine manufacturers like Pfizer. The company’s shares have fallen by up to 30% this year due to the expected decrease in sales for its COVID-19 vaccine, Comirnaty, and antiviral treatment, Paxlovid.
So what:
During the peak of this bearish sentiment, Pfizer’s dividend yield reached an impressive 4.5% on an annualized basis. Furthermore, the company’s stock has consistently been the most affordable among its major pharmaceutical counterparts in 2023, based on various valuation metrics.
Investors seem to have overlooked Pfizer’s internal pipeline activities and its significant $70 billion investment in business development over the past two years. The company has promising candidates in crucial areas such as obesity, cancer, immunology, and infectious diseases, which are currently undervalued.
Now what:
Is Pfizer’s stock a strong buy? The answer is a resounding “yes.” Pfizer offers an exceptionally high dividend yield for a megacap healthcare stock. In addition, its pipeline of potential drugs is undervalued. Furthermore, it still possesses the financial capability to pursue strategic acquisitions as opportunities arise.
