Third purchase in 31 days? Now, that's what I'm talking about. I'm starting to feel like the Lanny of old again, if only the grey hair can revert back to black, I'd appreciate it. January finished off with some tail winds, as big final year earnings releases are coming out, Trump is making his speeches and movements, as well as your everyday volatility that January typically brings. As dividend investors, we need to sit tight and buy when we find the right value at hopefully, the right times if you can. This purchase signifies that based on my analysis. Let's find out why I purchased Pfizer (NYSE:PFE)!
Pfizer Stock Purchase
I cannot believe I bought Pfizer. What many of you may not know is that Pfizer was the first individual stock that I really purchased back in my early days. I believe this one was a 2010 purchase, if I'm not mistaken, back when it was trading in the low-to-mid $14s. Well, times have changed, their dividend has grown every year since then and the "blue" pilled company has been very strong as of late.
Pfizer has $195B in market capitalization, released their earnings that shared 11% revenue growth, with 9% diluted EPS growth, as well - not too bad. What does that mean for dividend investors? It means they are performing better than in the past, which allows room to continue to pay the dividend, as well as increase it!
1.) Though they were not on my 2017 Stocks to Look forward to, I wanted to build this position up from an investment basis that started such a long time ago, as they produced only around $85 in forward income for me. I know that may sound like quite a bit, but I wanted a more round/robust position in Pfizer, but never could think of the right time. Well - I picked them up 1 day before their ex-dividend date, talk about timing. Further, their product brands in Viagra, Lipitor, Advil, Chapstick, Centrum, Robitussin, Thermacare, I feel like I can go on... just like Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ); love keeping it simple here.
2.) They are back on a streak of 6, going on 7 years of dividend growth in which they've been similar to Johnson & Johnson, in that they always seem to increase by around that 7% mark.
3.) At roughly a forward-looking $2.55 based on their earnings release guidance, the purchase price at $31.4862, shows a forward Price to Earnings (P/E) ratio of 12.35. Not too bad at all, and definitely fits within the Dividend Diplomat Stock Screener!
4.) Additionally, their payout ratio, based on $1.28, is smack dab in the middle! 50% going forward is incredible and leaves plenty of room for further growth. I would also like to point out the yield of 4.065%, which is greater than their 5-year yield average by approximately 60-65 basis points, showing further signs of undervaluation.
5.) Similarly, this falls in line and is part of my upcoming strategy post, which will come out soon, very boilerplate and easy, but still want to show how I'm making this a bit "easier" this year!
See my trade screen shot below:
I purchased $800 worth at $31.4862 per share for a total of 25.2825 shares. This alone adds $32.36 to my forward dividend income and is enough to add a whole share during the year in reinvestment. This now increases my position to over 90 shares of this pharmaceutical beast!
Pfizer Stock purchase summary & Conclusion
My position now sits at ~91.59 shares of Pfizer in my portfolio and is now producing me forward income of $117.24 or $29.31 per quarter or almost a full share per quarter now. I'm very lucky to have had some cash available and am able to knock away at the investment goals I have established. I am definitely excited for March now, given that this bad boy comes early in the month, i.e. on the 1st day. A little busy season present, right? Kidding, kidding… on that note, on my watch, I am less than 50 days from this being over. Thank God, is all I have to say. Sorry to digress… Overall, I'm excited with this purchase and to continue my path to accomplish my goals set for 2017.
What do you guys think? Like healthcare or pharmaceuticals at the moment? Making any moves with the roller coaster market? How does everyone feel? Anyone buy Pfizer towards the end? Hope all has been well and you've maintained your health, stayed safe from the winter storms and kept warm. Talk to you soon and thank you so much for stopping by!