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Pfizer Yielding 4.5% Is Getting Added To My Dividend Harvesting Portfolio And Maybe The Main Account

May 22, 2023 9:00 AM ETPfizer Inc. (PFE)AZN, BMY, MRK41 Comments
Steven Fiorillo profile picture
Steven Fiorillo


  • Pfizer has fallen through the $40 level and looks very enticing as its dividend yield sits at 4.5%.
  • Pfizer has been a dividend gem, paying a dividend since 1980, and its current dividend has 12 years of annual growth, and a sub-50% payout ratio of projected 2023 EPS.
  • Prior to the revenue boom from COVID vaccines, PFE had generated over $13 billion in FCF annually from 2013-2020, allowing it to invest in its future while returning capital to shareholders.

Pfizer Canada head office in Kirkland, Quebec, Canada.


The last time Pfizer (NYSE:PFE) was trading in the low $40 range, I considered adding it to my Dividend Harvesting Portfolio series on Seeking Alpha (can be read here), and possibly my main dividend account. I

This article was written by

Steven Fiorillo profile picture
I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BMY either through stock ownership, options, or other derivatives. 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.

Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you.

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Comments (41)

I am not going to look this gift horse in the mouth. Reminds me of META when everybody hated it, and just about every “ analyst “ found reasons to give it a sell recommendation. Remember? Now everybody loves META.
I actually enough shares to open a position in Pfizer this past week with a cost basis of 37.97. The reasons you cite are all worthwhile though a bit short on the pipeline - the most important thing when evaluating a pharmaceutical company.

I am overweight in healthcare already but I couldn't resist. I hold positions in MRK; NVO; SNY; GSK; and RHHBY as well.
I get it. You're buying PFE because of its dividend. That's fair and maybe you should have kept it at that. Your FCF valuation analysis comes down to guessing (and I mean guessing) that FCF will be a made-up number. It might have been more worthwhile to do a PE valuation where you could at least benefit from a near term projection or a consensus, not a 10-year average from a long time ago. Then you kind of rush through the pipeline at the very end of your article.

I think if you're doing a serious analysis of PFE, you have to at least talk about how its betting the future of the company on a series of acquisitions (Seagen, Biohaven, Arena, GBT) to generate high single-digit revenue growth, while internal launches just about offset loss of exclusivity.

If you're recommending buying PFE for its dividend, that's certainly valid, as far as it goes. But don't try and make it more than it is.
skoenig613 profile picture
Just look at OGN
PFE buyback would boost price 10/15%.
lshiang profile picture
I was somewhat surprised with Pfizer M&A to take over Seagen at a price of $43B. Maybe Mr. Bourla just got lucky in the last few years to get COVID vaccine business correctly.
Started my position at 42 and have since purchased more at 38…It feels rewarding to finally see a sliver of good news with a nice% increase today…going to hold, get a few dividends and hope that PFE turns the corner with more good news and with accompanying increase in share price…
Steven Fiorillo profile picture
@tclick1076 thanks for reading and commenting
@Steven Fiorillo did you take into account in the calculations that Pfizer separated a significant portion in the form of Upjohn just before the Сovid?
cfrd profile picture
always playing a sure bet ... pfe announced that an non-approved new drug is good for weight loss....waiting until peer review and FDC approval.
Steven Fiorillo profile picture
@cfrd thanks for reading and commenting
@cfrd Or rather is passed its Phase II trial with good results.
josephaoppenheim profile picture
Good decision. Earlier this week, PFE said they will focus more on dividends and buybacks.

Plus, they just said today…”Pfizer oral weight loss drug may be as effective as, quicker than Ozempic injection by Novo Nordisk, study says”
Steven Fiorillo profile picture
@josephaoppenheim thanks for reading and commenting
I love the dividend however there are better places to invest right now.
@Steven Fiorillo thanks for the solid overview!
The Dividend Collectuh profile picture
Started a position at $40 and buying on the dip.
Steven Fiorillo profile picture
@The Dividend Collectuh thanks for reading and commenting
ndardick profile picture
This is a timely, well researched, well analyzed and well written article. Having sold PFE at close to $60, I started buying PFE again when it fell to $42 and have added substantially close to its current market price to make it the 11th holding in size out of our family's fairly concentrated portfolio of 25 stocks that is equal weighted the Healthcare Sector compared to the S&P 500 weighting for this sector, with full positions in CVS and PFE and half positions in BMY and VTRS. I will gladly take PFE to an overweight if the price falls below $35. Price matters. Valuation matters. And the dividend matters.
Steven Fiorillo profile picture
@ndardick thanks for reading and commenting
A stock, what is it worth? It WAS does not matter. The question is what is it worth today. The current dividend is high because the stock price is down. As a long term holder of PFE. Hind sight. I perhaps should have sold AND PAID THE TAX ON MY GAINS. Net money has simply vanished and was I to sell now I would still owe TAX on my gains.
ndardick profile picture
@SUE2 Hindsight is always 20/10 (even better than perfect eyesight of 20/20), but INSIGHT CAN PREVENT OVERSIGHT.
thirdcamper profile picture
@ndardick Outtasight!
@SUE2 Once I hit RMD age(for me 70.5) I would subtract 15% ltcg tax rate from the from the gain then divide it by what I would get in divs for 1 year That would tell me how many years of net divs the gain was worth..Today,at 81, I would put the profit in a short term t-bill or CD & re-invest the original dollars
I expect Fed has another hike but if they pause PFE stands out! Pipeline is huge and undervalued. Under 40 a long term steal!
Steven Fiorillo profile picture
@rockjcp thanks for reading and commenting
Pfizer is a growth dividend machine that raised the dividend 1 cent per share per quarter last year d3spite record windfalls of cash. Speaking of cash and the balance sheet they are borrowing 31 billion to make yet another non accretive acquisition of Seagen which they are buying for 43 billion Seagen which generates around 2 billion. The dividend yield is 4.5 because the stock price has dropped over 40% partly in recognition of Pfizer spending almost 70 billion to acquire multiple companies with very limited revenue
Sage Advisors profile picture
@Jlexus1953 PFE used the Covid cash to buy newly commercial companies - GBT, BHVN, SGEN. They are at the early stages of building sales. If you buy commercial assets when they are at or close to peak sales, you are likely buying an asset which will soon be going off patent All that said, they surely paid up for SGEN.
@Sage Advisors thanks for the reply. Management had to know that the Covid windfall would surely dissipate yet did not invest any of that cash to buy back some of the 5.7 billion outstanding shares in fact they issued more stock to reward executives. All the purchases assume that existing products will grow or in some cases that late stage compounds will be approved and develop into blockbusters. This is on top of increasing R&D to 15 billion.I have not heard of any new billion dollar drugs outside of Covid in the last three years
Sage Advisors profile picture
@Jlexus1953 You make good points. The Covid franchise will precipitously fall off. The key issue is whether the management team forecasted the magnitude of that accurately. So far, they delivered 1.25 or the 3.25 forecast so they are off to a good start. They have GLP-1 drugs similar to LLY's ad Novo's which are oral and that may be their blockbuster. Historically, PFE has been very strong in marketing and not so hot in drug development. They may be able to extract a lot of value from the acquired assets. The stock did a 5 year round trip. The company is better positioned today than 5 years ago for sure.
Great summary, I am surprised how low the PPS is headed when they do billions in revenue and profits.
Steven Fiorillo profile picture
@JoeMonte thanks for reading and commenting
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