Analysis of Pfizer Stock Investment Potential

Key Facts and Data Points

• Dividend Growth: Pfizer has raised its dividend payout for 16 consecutive years, with a 54% increase over the past decade.
• Current Dividend Yield: 6.45% (as of March 19, 2025).
• Market Cap: $149B.
• Current Stock Price: $26.18 (down -0.49% from previous close).
• Revenue Growth: 7% year-over-year in 2024, reaching $63.6 billion.
• Patent Challenges:
  • Eliquis (with Bristol Myers Squibb) sales accounted for 11.6% of revenue in 2024, set to face generic competition by 2028.
  • Ibrance sales fell 8% in 2024 to $4.4 billion, while Novartis' Kisquali grew 46% to $3 billion.

Market Trends and Business Impact

• Stock Performance: Pfizer stock is down over 50% from its all-time high due to declining COVID-19 product sales (e.g., Comirnaty and Paxlovid) and patent expirations.
• Trade War Concerns: The broader market has been impacted by fears of tariffs, with tech stocks hardest hit. However, Pfizer is less exposed due to minimal reliance on imported ingredients.

Competitive Dynamics

• Pipeline Strength: Pfizer invested pandemic profits in a robust drug pipeline, securing 9 FDA approvals in 2023 and over a dozen in 2024.
• Diversified Portfolio: Despite challenges, Pfizer's diversified product portfolio provides stability and growth opportunities beyond its top products.

Strategic Considerations

• Dividend Safety: Management expects adjusted earnings of $2.80-$3.00 per share in 2025, comfortably covering the annual dividend obligation of $1.72 per share.
• Long-Term Growth: New therapies are expected to offset losses from patent expirations, maintaining revenue and dividend growth for at least a decade.

Regulatory and Long-Term Implications

• Patent Cliff Mitigation: Pfizer's focus on innovation and new product launches should help mitigate the impact of upcoming exclusivity losses.
• Passive Income Potential: The high dividend yield (6.45%) makes Pfizer an attractive option for income-focused investors.

Conclusion

Pfizer offers a compelling combination of reliable dividends, a strong pipeline of new products, and a diversified portfolio. While challenges such as patent expirations exist, they are unlikely to derail long-term growth or dividend increases. Investors seeking stable returns and passive income may find Pfizer an attractive option for the next decade.