Pfizer Is a Dirt-Cheap High-Yield Stock, But Is It a Buy?

Core Viewpoint - Pfizer Inc. is currently viewed as a high-yield bargain stock with attractive dividends and reasonable valuations, making it a potential investment opportunity despite recent stock struggles [1]. Financial Performance - Pfizer's dividend yield stands at 6.5%, with a payout ratio of 54% of earnings, and the company has increased dividends five times in the past five years [2][3]. - The stock trades at a price/earnings ratio of 8.8X forward earnings, significantly lower than the Large Cap Pharmaceuticals industry's average of 17.17 [3]. Growth Prospects - Pfizer aims to add $25 billion to its top line by 2030, having already increased revenues by nearly$20 billion through acquisitions, notably Seagen, which contributed $3.4 billion in sales last year, reflecting a 38$1 billion in annual sales [7]. - Pfizer is targeting $1.5 billion in net cost savings by 2027 through its Manufacturing Optimization Program and maintains a strong cash position of$20.5 billion against short-term debt obligations of $6.9 billion [7]. Investment Considerations - Holding onto Pfizer stock is recommended due to its acquisitions and solid financial conditions, with current trading levels providing a cushion against market declines [8]. - However, the company faces challenges, including a significant drop in sales of Covid-19 products, with projected sales of Comirnaty and Paxlovid at$11 billion in 2024, down from $56.7 billion in 2022 [9].