Pfizer (PFE) is a leading international pharmaceutical company that can trace its history back more than 170 years; its business units include Oncology, Inflammation & Immunology, Rare Disease, and Vaccines, notes Gordon Pape, editor of Internet Wealth Builder.
Everyone knows name Pfizer these days; it was the first company to have a COVID vaccine approved for general use. That vaccine — developed along with partner BioNTech (BNTX) — has proven to be highly effective with minimal side effects.
For a company that has had so much positive press, Pfizer’s share price has been a disappointment. It’s up only about $2 since the start of the year and just 9.5% since it was recommended.
The company reported strong first-quarter sales of $14.6 billion, a 43% increase over the same period a year ago. Much of that growth was fueled by sales of the COVID-19 vaccine, which accounted for $4.9 billion in revenue. However, sales were up in all of the other main corporate divisions as well.
Adjusted income was $5.3 billion ($0.93 per share) compared with $3.5 billion ($0.63 a share) in the same period of 2020. That’s a 47% increase on a per share basis.
The stock pays a quarterly dividend of $0.39 per share ($1.56 annually), to yield 4% at the current price. Shareholders who elected to hold stock in Viatris Ltd., a company that incorporates Pfizer’s old Upjohn division, have also started to receive an $0.11 quarterly payment.
The company recently completed new vaccine supply deals with the European Union and has increased its sales guidance for this year to $70.5-$72.5 billion, a big jump from the previous forecast of $59.4-$61.4 billion. Earnings per share in 2021 are expected to be $3.55-$3.65, up from the previous projection of $3.10-$3.20.
It’s difficult to understand why Pfizer isn’t doing better. Some of its patents expire soon but, despite that, revenues are booming thanks mainly (but not exclusively) to the vaccine.
The shares pay a decent dividend, the p/e ratio is a reasonable 19.62, and the beta (a risk measurement) is low at 0.67. The stock represents good value at this price.