Core Viewpoint - Pfizer is experiencing a transition phase with declining COVID product sales but growth in non-COVID drugs and new acquisitions, positioning the company for future operational growth [2][3][17]. Sales Performance - Sales of Pfizer's COVID products, Comirnaty and Paxlovid, are projected to decline to approximately $11 billion in 2024 from $56.7 billion in 2022, with similar revenues expected in 2025, excluding one-time benefits [3]. - Non-COVID operational revenues improved by 12% in 2024, surpassing the guidance range of 9-11%, driven by key products and new acquisitions [4]. Growth Drivers - Pfizer's acquisition of Seagen and the performance of its oncology drugs, which generated $3.4 billion in sales in 2024 (up 38% pro forma), are significant contributors to growth [6][7]. - The oncology segment accounts for about 25% of total revenues, with a 26% operational growth in 2024, supported by drugs like Xtandi and Padcev [7]. Stock Performance and Valuation - Pfizer's stock has risen 5.9% over the past three months, although it has declined 9.8% in the last six months, underperforming the industry [1][8]. - The stock is trading at a forward price/earnings ratio of 9.0, lower than the industry average of 17.51 and its own 5-year mean of 11.11, indicating an attractive valuation [10]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings has increased from $2.93 to $2.97 per share, while the estimate for 2026 has decreased from $3.04 to $2.99 per share [11]. Future Outlook - Pfizer anticipates continued growth in non-COVID sales and significant cost reductions, aiming for savings of at least $6 billion, which should support profit growth [17]. - The company returned $9.5 billion to shareholders through dividends in 2024, with a dividend yield of around 6.4%, making it appealing for long-term investors [18].

Investment Rating - The investment rating for the pharmaceutical industry is "Outperform the Market" (maintained) [1] Core Insights - The main growth driver remains the launch of innovative products, particularly in the GLP-1 category, with significant revenue increases reported by companies like Eli Lilly and Novo Nordisk [3] - The report highlights the strong performance of key products across various therapeutic areas, including oncology, metabolism, and immunology, with notable sales growth percentages [3] Summary by Sections 01 Overview of Overseas Pharmaceutical Companies Q4 2024 and Annual Performance - Eli Lilly's revenue increased by 32% in 2024, driven by GLP-1 products [3] - Novo Nordisk's sales reached approximately $40.5 billion, a 25% increase, with significant contributions from GLP-1 products [29] - AstraZeneca and Merck also reported strong growth, with revenue increases of 21% and 10% respectively [3] 02 Performance Review of Overseas Pharmaceutical Companies - Eli Lilly's Q4 sales reached $13.5 billion, a 45% increase, with GLP-1 products contributing significantly [18] - Novo Nordisk's GLP-1 products achieved sales of approximately $22.5 billion, with a 20% increase in the diabetes segment [29] - JNJ's pharmaceutical segment reported $14.3 billion in Q4, with oncology products driving growth [40] R&D Investment - The top 15 pharmaceutical companies invested over $150 billion in R&D in 2024, a 7% increase year-on-year, with a research expense ratio of 21.8% [8] Sales Performance in China - Seven overseas pharmaceutical companies reported combined sales of approximately 515 billion RMB in Q4 2024, with a year-on-year growth of 10% [14]

Group 1 - The article is the first in a series of comparative analyses between two pharmaceutical companies, with plans to publish one article each week over the next four weeks [1] Group 2 - Allka Research has over two decades of experience in investment, focusing on uncovering undervalued assets in ETFs, commodities, technology, and pharmaceutical companies [2] - The company aims to simplify investment strategies for both seasoned and novice investors, fostering a community of informed investors [2] - Allka Research seeks to share its insights through Seeking Alpha, contributing analyses and perspectives to empower financial decision-making [2]

Core Viewpoint - The article discusses differing opinions on dividend investing, highlighting a perspective that views dividends as a mere removal of value from a company's share price, while others advocate for the benefits of receiving dividends as a form of income [1]. Group 1: Dividend Investing Perspectives - Some investors believe that dividends do not add value and suggest creating synthetic dividends by selling shares instead [1]. - The article emphasizes the importance of quality blue-chip stocks, BDCs, and REITs for dividend investing [1]. Group 2: Investor Profile - The author identifies as a buy-and-hold investor focused on quality over quantity, aiming to supplement retirement income through dividends within the next 5-7 years [1]. - There is a goal to assist lower and middle-class workers in building investment portfolios of high-quality, dividend-paying companies [1].

Group 1: Verizon Communications - Verizon's stock has increased by approximately 6% over the last 12 months, driven by investor optimism regarding potential declines in interest rates [3] - The company is projected to achieve single-digit percentage top-line growth in 2024, with wireless service revenue expected to rise between 2% and 2.8% for the full year [4] - Verizon's free cash flow is anticipated to be between $17.5 billion and $18.5 billion, significantly exceeding the $11.2 billion paid out in dividends over the past year [4] - The stock is currently trading at a forward price-to-earnings (P/E) multiple of just 9, making it an attractive option for buy-and-hold investors [5] Group 2: Toronto-Dominion Bank - Toronto-Dominion Bank offers a dividend yield of 4.9%, which is considered high for a leading financial institution [6] - The stock has faced negative sentiment following a $3 billion fine related to money laundering failures and indefinite caps on its U.S. retail banking operations [6] - Despite current challenges, there is optimism that the bank can recover by implementing effective anti-money-laundering controls [7] - The stock trades at a forward P/E of just 11, indicating it may be a promising investment opportunity [8] Group 3: Pfizer - Pfizer currently provides a dividend yield of 6.5%, which is exceptionally high for a blue-chip healthcare stock [9] - The stock has been undervalued due to market uncertainties surrounding the healthcare industry and the company's reliance on vaccines [9] - Pfizer's revenue increased by 12% operationally last year, excluding the impact of its COVID-19 vaccine and antiviral pill [10] - The company has a robust portfolio with over 300 approved drugs and a pipeline of 115 drug candidates, including a promising weight loss drug candidate, danuglipron [11] - Given its current valuation, Pfizer may deserve a higher price, and investing in it could yield substantial returns over time [11]

Core Viewpoint - Pfizer is currently undervalued and presents a potential investment opportunity for long-term investors despite recent performance challenges [2][12]. Financial Performance - Pfizer's annual sales peaked at over $100 billion in 2022 but fell by more than 40% in 2023 due to a decline in COVID-19 related sales [3][4]. - In 2024, Pfizer generated $5.7 billion from its COVID medicine Paxlovid, a significant increase from $1.2 billion in 2023, and $5.4 billion from its vaccine Comirnaty, despite a 52% decrease year-over-year [6]. Product Pipeline and Future Growth - Pfizer has expanded its product lineup and pipeline, earning approvals for new products like the RSV vaccine Abrysvo and alopecia areata treatment Litfulo [7]. - The company is conducting over 20 late-stage studies in oncology and anticipates developing several cancer medicines that could generate over $1 billion in annual sales [8]. - Pfizer's pipeline includes 115 candidates across all clinical trial stages, indicating potential for future revenue growth [7][9]. Cost Management - Pfizer aims to achieve net cost savings of $4.5 billion by the end of 2025, building on $4 billion in savings from the previous year, which should positively impact the bottom line [10]. Valuation Metrics - Pfizer's forward price-to-earnings (P/E) ratio is approximately 9, compared to the healthcare industry average of 17.7, suggesting it may be undervalued [11]. - The company offers a dividend yield of 6.5%, making its shares attractive for patient investors [12]. Long-term Outlook - While Pfizer may not see a full recovery in the next six to twelve months, it has the potential to deliver solid returns over the long term, making it a compelling investment at current levels [13].

In my last article about Pfizer Inc. (NYSE: PFE ), I argued that the low price and high dividend might offset the expanding risks. In the meantime, an investment would have returned about 5% and although this does not seem likeMy 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 ...

Core Viewpoint - Pfizer's CEO Albert Bourla indicated that the company may consider relocating drug manufacturing back to the US if tariffs imposed by President Trump impact operations [1][7]. Group 1: Manufacturing Operations - Pfizer currently operates 13 manufacturing sites in the US, with some being large-scale facilities [2]. - The company has the capability to transfer manufacturing from overseas sites to US sites if necessary [2]. - Bourla emphasized that the US manufacturing sites are currently operating at good capacity [2]. Group 2: Political Context - Bourla expressed that he was not surprised by Trump's election victory, noting it was a significant win [3]. - He acknowledged that the new administration presents both risks and opportunities for the pharmaceutical industry [3]. - The company aims to maintain close relations with the administration to influence the regulatory environment [3]. Group 3: Tariff Implications - Trump announced plans to impose 25% tariffs on Mexico and Canada, which could affect Pfizer's operations [4]. - The Trump administration previously imposed a 10% tariff on China, with an additional 10% set to take effect soon [5]. - Bourla stated that Pfizer does not currently rely on China, Canada, or Mexico for its operations [5].

Group 1: Pfizer - Pfizer's shares have declined approximately 57% from their peak in late 2021, primarily due to faster-than-expected declines in COVID-19 product sales and upcoming patent cliffs for top-selling products [3][4] - Despite the stock price drop, Pfizer has maintained its dividend payout, raising it for the 16th consecutive year, resulting in a substantial 6.6% dividend yield at recent prices [3][7] - In 2024, sales of the blood thinner Eliquis grew by 9% to $7.4 billion, accounting for 11.6% of total revenue, but generic versions are expected to launch in 2028, which may significantly impact revenue [4][7] - Pfizer's total revenue rose by 7% last year, and excluding declining COVID-19 product sales, total sales surged by 12% year over year [7] - The FDA approved nine new drugs from Pfizer's pipeline in 2023, with more than a dozen approvals granted in 2024, indicating a strong development pipeline to offset future losses [6][7] Group 2: UnitedHealth Group - UnitedHealth Group's shares have decreased by about 25% from their peak in November 2022, driven by unexpectedly high healthcare utilization rates that negatively impacted profits [8] - Medical costs rose by 9% in 2024, while total revenue only increased by 6%, leading to a significant 35% decline in net income to $15.51 per share [8] - The company has the ability to raise premiums to maintain profitability, as options in the insurance industry have become limited due to consolidation [9] - UnitedHealth Group employs 90,000 physicians through its Optum Health division, which represents roughly 10% of the total physician workforce in the U.S., allowing for better control over medical expenses [10][11] - Despite the stock price decline, UnitedHealth Group has increased its dividend payout by 94% over the past five years, although the current yield is only 0.4% [12]

Core Viewpoint - Three major healthcare stocks, Johnson & Johnson, Novartis, and Pfizer, are identified as strong dividend investment opportunities due to their solid financials and growth prospects. Johnson & Johnson - Johnson & Johnson has a remarkable dividend history, having raised its payouts for 62 consecutive years, qualifying it as a Dividend King [2] - The company faces legal challenges related to its talc-based products, which have resulted in numerous lawsuits alleging cancer risks [2][3] - Despite these legal issues, Johnson & Johnson maintains a AAA credit rating, indicating strong financial health and the ability to meet obligations [4] - A proposed solution through a subsidiary aims to resolve over 99% of the lawsuits, suggesting progress in mitigating legal risks [5] - The company has a diversified business model, with a strong medical device unit that reduces reliance on pharmaceuticals [5] - Johnson & Johnson's underlying business remains robust, making it a solid choice for income-oriented investors [6] Novartis - Novartis offers a high dividend yield of 3.5%, significantly above the S&P 500 average of 1.3%, and has increased its payout for 28 consecutive years [7] - The company has a payout ratio of around 64%, indicating potential for future dividend increases as growth continues [7] - Novartis targets sustainable growth of approximately 5% per year through 2029, with a strong pipeline of over 100 projects across various therapeutic areas [8] - The stock is valued at just 13 times projected future earnings, providing a margin of safety for investors seeking high yields [9] - Novartis is considered an underrated buy due to its steady growth and reliable dividend payments [9] Pfizer - Pfizer boasts an ultra-high forward dividend yield of 6.5%, with management committed to maintaining and growing this payout [11] - The company has a strong track record of dividend payments, with 345 consecutive quarterly payments and 16 years of increasing dividends [12] - Despite a decline in COVID-19 sales and a looming patent cliff, Pfizer has strong growth drivers, including cancer drugs and migraine therapies [13] - The stock is trading at a forward price-to-earnings ratio of 9.07 and a low PEG ratio of 0.18, indicating it is undervalued [14] - Pfizer's ability to generate sufficient free cash flow supports its dividend commitments, making it an attractive investment [11][14]