Imagine a company whose stock that hit an all-time in December 2021, after soaring 50% that year. And that company’s sales doubled in the two years leading up to 2022. And its operating profits quadrupled.
Also imagine a company whose biggest product is set to see its sales collapse in the next three years from about $38 billion in 2022 to $10 billion in 2025.
Guess what? These two companies are actually one and the same: the pharmaceutical giant, Pfizer (PFE).
Pfizer’s fortunes soared during the pandemic, thanks to its partnership with BioNTech (BNTX) on the highly successful BNT162b2 COVID vaccine.
But what about post-pandemic Pfizer?
I believe this company is a perfect candidate for an equity income fund…or for an individual investor looking for a stock with rock-solid fundamentals and a nice dividend yield, which currently stands at nearly 4%.
Pfizer’s Fundamentals
Sure, Pfizer’s earnings are forecast to fall sharply in the current year—from $6.58 per share to about $3.62 a share. But that will still allow the dividend to move upwards with an acceptable level of cover. The payout ratio would rise to 46%, still well below Pfizer’s 10-year average ratio of 67%.
Other measures of Pfizer’s operating performance also show the company is quite healthy.
Sure, Pfizer’s 37% profit margin will no doubt shrink as demand for the COVID fades. But, if you take the longer-term view of Pfizer, you will see its profit margin has averaged 27% for the 10 years leading up to 2022. In that same period…
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