Down 62%, Should You Buy the Dip on Pfizer?

Core Viewpoint - The narrative surrounding Pfizer is currently negative, but this presents an interesting investment opportunity as the stock price has significantly declined from its peak during the COVID-19 pandemic [1][2]. Financial Performance - Pfizer's stock has decreased over 63% from its peak in 2022, following a sell-off in the market [1]. - The dividend yield has increased to 7.5%, providing a substantial annual return for investors as long as the dividend is maintained [4]. - Pfizer's price-to-earnings ratio is currently less than 8 times the 2025 earnings estimates, indicating a low valuation [5]. Dividend Sustainability - The high dividend yield is more a reflection of negative market sentiment rather than a sign of unsustainable business fundamentals [6][7]. - Pfizer's management recently raised the quarterly dividend, and the annual payout of $1.72 per share represents only 61$150 billion by 2030 [11]. - The company has made strategic acquisitions, such as Seagen for $43 billion, to bolster its oncology business [11]. - Despite potential declines in sales due to patent expirations for key products, Pfizer's pipeline and acquisitions position it for future growth [10][11]. Market Outlook - Analysts have varying long-term earnings growth expectations for Pfizer, ranging from 2.5% to over 13.8% [12]. - Even with minimal growth, the stock could still deliver 10% annualized total returns due to the dividend, with potential for higher returns if growth exceeds expectations [13].