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Pfizer Inc.: Invest For Attractive Valuation And The 4% Dividend Yield

Published Thu, 09 Feb 2017 14:15:58 -0500 on Seeking Alpha

Investment Thesis
Pfizer Inc. (NYSE: PFE) is one of the world's largest pharmaceutical firms with sales exceeding $50 billion. The company is currently attractively valued at a blended P/E ratio of 13.3, offering a current dividend yield of 4%. Pfizer is awarded an S&P credit rating of AA and possesses a modest debt to capital ratio of 28%.
Prior to 2004, the company could have been described as a fast-growing dividend paying stock. However, since 2004, operating earnings growth has slowed considerably. Therefore, Pfizer was once a powerful total return producer that has morphed into a high-yielding blue-chip dividend paying stock offering only moderate growth potential and an above-average current yield.
Consequently, I believe that Pfizer is best suited for the prudent income-oriented investor seeking above-average current yield and safety. Therefore, Pfizer might be especially interesting to the retired investor looking for an above-average level of income in order to fund their retirement needs. However, I also intend to demonstrate that capital appreciation potential might also be surprisingly good going forward.
Pfizer It's All About The Dividend
I recently read an excellent article titled "Pfizer May Be Another IBM" that DoctoRx authored on Pfizer, and thought it was an excellent piece of research on the company. However, there were certain areas of the article that I did not agree with. To be clear, I found that the article contained... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PFIZER 34.00   29.3 1.16 1.28 3.71


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