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While I not only covered different pharmaceutical companies for a long time but also invested in several pharmaceutical businesses – like Novo Nordisk or Gilead Sciences – I only recently started to also look at Pfizer Inc. (
Pfizer: Dividend Investor's Dream And Patent Cliff Nightmare
Summary
- Pfizer offers a high 7.4% dividend yield and trades at low valuation multiples, making it attractive for income-focused investors despite recent underperformance.
- The company faces significant patent cliffs, risking about $20 billion in annual revenue, and is unlikely to avoid revenue declines in the next few years.
- Management is responding with cost cuts, acquisitions, and licensing deals, but growth prospects remain limited and stability is a key concern.
- Given its fair valuation and strong dividend, I rate Pfizer a 'Buy' for investors seeking stability and income, not high growth.
My analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap companies).My academic background is in sociology and I hold a Master’s Degree in Sociology (with main emphasis on organizational and economic sociology) and a Bachelor’s Degree in Sociology and History.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of GILD 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.
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