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Pfizer: Why It's An Easy High Conviction Buy

Apr. 06, 2021 8:44 AM ETPfizer Inc. (PFE) Stock112 Comments


  • Pfizer projects approximately $15 to $20 billion in 2021 revenue from the vaccine.
  • Investors appear to view the spike in vaccine revenue as a one-time event.
  • However, there are reasons to believe vaccine revenues could continue.
  • Even without the vaccine, Pfizer has a solid growth profile.

Covid-19 Coronavirus Vaccine vials in a row macro close up
Photo by MarsBars/E+ via Getty Images

Pfizer's (NYSE:PFE) revenue fell from $51.75 billion in 2019 to $41.9 billion in 2020.

Considering those numbers, perhaps you are wondering why the title of this article touts the stock as a buy. The drop in

This article was written by

Chuck Walston profile picture

Chuck Walston is a U.S. Army veteran and a retired law enforcement officer with approximately 20 years of experience as a retail investor. He focuses on dividend stocks and concentrates on companies with competitive advantages and strong balance sheets.

Chuck is a contributing author for the investing group The Dividend Kings which focuses on helping investors safeguard and grow their money in all market conditions through the highest-quality dividend investments. Features include: 13 model portfolios, buy ideas, company research reports, and a thriving chat community for readers looking to learn how to invest more intelligently in dividend stocks. Learn More.

Analyst’s Disclosure: I am/we are long PFE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I have no formal training in investing. All articles are my personal perspective on a given prospective investment and should not be considered as investment advice. Due diligence should be exercised and readers should engage in additional research and analysis before making their own investment decision. All relevant risks are not covered in this article. Although I endeavor to provide accurate data, there is a possibility that I inadvertently relay inaccurate or outdated information. Readers should consider their own unique investment profile and consider seeking advice from an investment professional before making an investment decision.

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Comments (112)

I never understood the logic of spinning off a company. Exactly how does this benefit the parent? Were Pfizer to retain Viatris exactly how would management be distracted? I suspect that the spin off mania is more about boosting percentage metrics like revenue growth. The people who really benefit from this kind of thing are the investment bankers. Having said that let me hasten to add that I dumped Viatris and added to PFE at the earliest opportunity because I am interested in sustainable growth.
Tim Mc profile picture
Hi Chuck, I didn't make it to Ranger School before my enlistment was up, but certainly admire those who got their tab, and especially those who served in a Ranger Battalion!
Anyway, I added to our relatively small position in PFE, behind ABBV, JNJ, CAH, MRK, BMY & MDT. I believe in their transition going forward, spinning off Viatris, their partnership with BioNTech, the success of their vaccine (knock on wood), and the potential need for annual boosters or versions to combat mutated strains sealed it for me. At worst, I collect a decent dividend. Having their vaccine in my veins is a plus.
Chuck Walston profile picture
@Tim Mc

I always viewed the 82nd as top notch. I think most of the guys in 1st Bat were former 82nd and 101st. We had war games against them, and one of my best LEO buddies (Stank) was 82nd. He told me he graduated from RIP and decided he wanted no part of Ranger School.

I was going to reenlist and was accepted for SF, but the recruiter advised me that if I graduated, I might not serve in an SF unit. The Army was drawing down on SF units as Vietnam was winding down. Decided to ETS, as they were going to send me to a leg unit (it was one tour and out in the BAT back then.)

Regarding PFE, I believe the worst case scenario is decent growth and a nice divvy from them. However, I also think there is a chance the vaccine will really push future revenues. Pfizer is now my largest pharma position.

Take care, Chuck
dunnhaupt profile picture
This may just be the beginning. The mRNA vaccines developed for COVID have opened up an entirely new window. Vaccines for other viral diseases, or perhaps even cancer, may some day become available.
Chuck Walston profile picture

And I note that some of the other vaccines are running into problems. Blood clots, etc.

BM Cashflow Detective profile picture
@Chuck Walston @dunnhaupt
There has been new information on this for the last 3 days that puts the risk of rare blood clotting into a different ratio.

"The breakdown comparison for reported cases of CVT in COVID-19 patients in comparison to CVT cases in those who received a COVID-19 vaccine is:

- In this study of over 500,000 COVID-19 patients, CVT occurred in 39 in a million patients.

- In over 480,000 people receiving a COVID-19 mRNA vaccine (Pfizer or Moderna), CVT occurred in 4 in a million.

- CVT has been reported to occur in about 5 in a million people after first dose of the AZ-Oxford COVID-19 vaccine.

- Compared to the mRNA vaccines, the risk of a CVT from COVID-19 is about 10 times greater.

- Compared to the AZ-Oxford vaccine, the risk of a CVT from COVID-19 is about 8 times greater.

However, all comparisons must be interpreted cautiously since data are still accruing."


Conversely, this means that also mRNA vaccines are not completely free from the risk of rare blood clotting.
banjoman profile picture
@dunnhaupt Ive always believed in Pfizer 😀 but let’s not forget that the Vaccine was developed by BioNTech and not Pfizer. Will be good to understand the contractual agreement between the two..
Well thought out by an outstanding individual.
We love our Rangers, thanks Chuck.
Chuck Walston profile picture

And I thank you,

Militiades profile picture
It's $40+ stock. Thought it was a can't miss under 36..
The Pfizer vaccine is the best one on the market. Even at a discounted price it costs more than other vaccines and is harder to store.
However the rich countries can afford to buy billions of doses over the next two years (including booster doses). That is worth at least $10 billion in revenue for say 2 years.
At $36-37 a share that looks like a good bet with more upside than down with a reasonably safe yield of 4% thrown in.
In addition you have any potential gains from the reorganisation of its business by spinning off some of its low growth businesses and new products in the pipeline.
pfizer really screwed the pooch (investors) on this vaccine. They are not charging near enough for this! Meanwhile biden pushes JNJ's way inferior vaccine. crazy
kthor profile picture

they'll make money by recurring shots! but I know what you mean, I think this vaccine is cheaper than the flu shot! (I just google price of flu shots cost) and I think they did state price will go up after this pandemic is over
young2000a profile picture
That's pandemic pricing. After the pandemic is over PFE can charge 7-8 times the pandemic pricing. Think about that for the annual booster shots globally.
North Carolina sites halt J&J shots after adverse reactions
Three vaccine clinics in North Carolina have suspended administration of the Johnson & Johnson vaccine after some people had adverse reactions, including fainting

Australia to buy extra 20 million doses of Pfizer vaccine
Australia says it has finalized a deal to buy an extra 20 million doses of the Pfizer vaccine as it rapidly pivots away from its earlier plan to rely mainly on the AstraZeneca vaccine
Country after country has stopped Astra's vaccine and news about blood clots just hails in with a delay of one week. The rising trend of clots has led authorities in different countries to pause Astra's vaccine. Pfizer will increase its order backlog by more than 300 million doses, ie the doses that Astra cannot deliver due to various reasons.... 💊

Pfizer became the world’s largest pharmaceutical company when it acquired ”Pharmacia”. 2019 for example was a successful year for Pfizer when it reached half a billion patients with medicine and vaccines. In addition, they received 10 approvals for new medicine. 2020/2021 will be known as the year when Pfizer delivered a vaccine against Covid-19.

Historically, there have been a long period with a higher dividend, but they had to cut it in half 2008/2009.

The financial crisis affected the pharmaceutical companies even though everyone needs medicines even during bad economic times, but from 2008 to 2009 earnings per share fell from $ 0.65 to $ 0.49, so of course there were problems. A reduced dividend was perhaps what was needed in this case to re-nourish the business in order to perform as well as it did. A company that lowers the dividend at the right time and then performs at the top year after year, should not be seen as something bad.

I think the split to create ”Viatris” was more good for Pfizer than the opposite. Competitors to the Covid-19 vaccine does not have the efficiency, distribution channels, and large scale manufacturing resources as Pfizer because they can benefit from being able to take a big chunk of these initial contracts. The current shareprice is very valuable according to what you get.

// Robert 🇸🇪
Solid company PFE, with a nice yield.
Based on Pfizer's revenue and income Viatris should be worth no more than $8-$9/share. Then if you consider that Inovio is at also $9 today it wouldn't make any sense...
Slow and steady wins the race. We’ve held thousands of shares of PFE for decades. Had great spinoffs and great dividends. All depends on your type of held portfolio. We are long term blue chip dividend buyers. And it’s paid off
in fantastic never ending “mail box” retirement money.
It is important to look at Pfizer in the context of all the Big Pharma companies - share pricing within the sector.
The mRNA vaccines produced by Pfizer, BioNTech and Moderna are the best in class in safety and effectiveness.
Corona virus is here to stay. We will need regular boosters or revised vaccine formulations to cope with any new mutant forms of the virus.
Current share pricing largely ignores this upside.
A clear BUY for diversified portfolios.
I own 30 different companies in mine and Pfizer is one of the 3 healthcare companies in the portfolio.
@Aziz P Which other two healthcare companies do you own? I own some Pfizer, but always concerned that it's more known for it's marketing/distribution prowers than for innovation. Curious how you choose the three to own.
Europe’s vaccine woes continue as Spain and Italy halt use of AstraZeneca shot for under-60s
For 20years the stock hasn’t gone anywhere (and has had a number of blockbusters in the 20years). Something fundamentally wrong with the structure of this company. Even with superior growth prospects the market is not bitting. Can understand short term mis-pricing, but market being wrong for 20 years ?
Flex68 profile picture
"Investors appear to view the spike in vaccine revenue as a one-time event."

Many other , pertinent points were illustrated in the article, but I believe that the current value of COVID-19 vaccinations are really not even being taken into account by investors.....

Much less if one expects that annual 'boosters' will be required, very similar to annual influenza vaccinations (and the coronavirus is known to be exceptionally adaptable).

I also believed that PFE was "An Easy High Conviction Buy" at $36.xx, less than a year ago, and invested at double my usual portfolio purchase.

Still believe , love the dividend , and would consider going back to the well on any retrace around $33.xx per share, should I have dry-powder available....
Fangorn profile picture
@Flex68 These Covid-19 vaccines will become "Annual", one presumes for everyone! Unlike FLU jab, which was annual for the elderly only!
@Fangorn "Everyone 6 months and older should get a flu vaccine every season with rare exceptions."

Flex68 profile picture
@Fangorn ,

Annual jabs.
Reasonable, and agreed.

Compared to daily/weekly pints at the Prancing Pony....

I should be invested in ale stocks!
MWRKY profile picture
07 Apr. 2021
Nice article and I will be looking into PFE further.
Very good article, thank you.
Chuck Walston profile picture

Happy to be of service,

Why do you call it a vaccine? www.bitchute.com/...
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