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Pfizer (PFE) is slowly becoming a cigarette stock.

By that I mean Pfizer is not a growth stock, not something you buy based on stock price. You buy it based on yield, and you expect erosion going forward.

For that kind of investor, Altria (MO) is, of course, a better proposition. Its current dividend yields 5.59%, and even though sales seem to have peaked, you're still looking at an operating margin of 25%. If your conscience can handle a cigarette stock, Altria is a good bet.

But my conscience won't go that far. Sorry. I've lost too many friends and relatives to cancer sticks. But if you're looking for reliable yield, the maker of Viagra could be for you.

Pfizer's future is foretold in its most recent quarterly report, which shows profits dropping 14% as generic competition finally sunsets Lipitor, its statin (otherwise known as atorvastatin). Full disclosure: I'm looking forward to getting the generic version of this drug the next time I visit my doctor.

But Lipitor is just the canary in the coal mine for Pfizer. Sales of its Prevnar 13 vaccine fell. The company won a legal battle that extends the patent life of Viagra to 2020, but that drug faces serious competition from other compounds -- its sales rose only 5%. Its best-seller is now Lyrica, a drug for fibromyalgia, followed by the pain reliever Celebrex.

Cris Frangold insisted a few months ago that he's impressed with Pfizer's pipeline, but look closely. There's only one real potential blockbuster -- Eliquis, which treats atrial fibrillation, or irregular heartbeat. But it has a partner on that drug, Bristol-Myers Squibb (BMY), and even if it meets its 2018 target of $3.2 billion in sales that's still less than Lyrica is selling now, and the sales have to be shared with a partner.

A recent Forbes note from Mathew Harper indicates Pfizer has no plans to change its course. Instead, it will keep money flowing through asset sales, like that of its baby food business to Nestle.

There is a bullish case to be made, but that just adds to the stock's appeal as a dividend play. There are a few things in the pipeline, there's $24 billion in cash it can use to buy other drugs as they enter the pipeline. The company is committed to keeping up the dividend, which means that yield is not threatened, as it would be for a company whose sales are rolling over.

The point is that you buy Pfizer for yield. You stick that 3.59% yield away and you smile, you leave it alone. When stocks fall in general, as they've been doing, you look for an entry point. Then you sock those shares away and you don't look at them until you're ready to write your will (which, if you're still smoking, could come sooner than you think).

Source: Think Of Pfizer As A Cigarette Company