Key Points Pfizer is one of the largest pharmaceutical companies on the planet. It has a proven track record of finding, developing, and commercializing new drugs. The recent price advance is worth paying attention to for turnaround investors. 10 stocks we like better than Pfizer › Pfizer (NYSE: PFE) has a huge 6.3% dividend yield. That's actually a lot lower than it was not too long ago, thanks to a large stock advance in recent days based on news. But Pfizer's price rebound actually started in A ...

Group 1: Market Overview - The stock market is currently richly valued, with some stocks still presenting as bargains despite the overall high valuations [2] Group 2: Pfizer - Pfizer's stock trades at a forward price-to-earnings ratio of under 8x, significantly lower than the S&P 500 healthcare sector's 17 times forward earnings [3] - Concerns regarding Pfizer include a looming patent cliff and the impact of trade policies, but a recent deal with the White House has exempted it from pharmaceutical tariffs for three years, allowing for price reductions and increased U.S. manufacturing [4][5] - Pfizer's pipeline includes multiple promising programs that may offset losses from patent expirations, and it offers a forward dividend yield exceeding 6.3%, with management committed to maintaining and growing the dividend [6] Group 3: Prudential Financial - Prudential Financial's forward earnings multiple is around 7.5, less than half of the S&P 500 financial sector's multiple, indicating it is even cheaper than Pfizer [7] - Recent revenue and earnings declines were primarily due to volatility in the variable annuities unit, which Prudential has exited, suggesting improved long-term prospects [7][8] - The stock's price-to-earnings-to-growth (PEG) ratio is only 0.58, reflecting optimism about Prudential's growth based on analysts' five-year earnings projections [8]

Core Viewpoint - Amgen's stock presents an attractive long-term investment opportunity despite recent share price declines and upcoming patent cliffs [1][2]. Group 1: Promising Drug Developments - Amgen is developing MariTide, a weight management drug that has shown a mean weight loss of up to 20% over 52 weeks, with a favorable monthly dosing schedule [4][5]. - The anti-obesity market is rapidly growing, and MariTide could generate sales of up to $3.7 billion by 2030, helping Amgen offset losses from patent expirations [6]. - Amgen has a robust pipeline with several ongoing programs, including bemarituzumab, which has shown promising results in a phase 3 study for metastatic gastric cancer [7][8]. Group 2: Recent Product Launches - Amgen's recent product approvals, such as Imdelltra for lung cancer, Tezspire for asthma, and Uplizna for rare diseases, are expected to contribute to top-line growth [9][10]. Group 3: Financial Strength and Dividends - Amgen has a strong dividend track record, having increased its dividend by 201.3% over the past decade, with a current yield of 3.5% [11][12]. - The company's cash payout ratio of 46.5% provides room for further dividend increases, making it an attractive option for investors seeking income [12][13]. Group 4: Valuation - Amgen's shares are considered reasonably valued, with a forward price-to-earnings ratio of 12.6, lower than the healthcare industry average of 16.4 [14][15]. - The market may be pricing in upcoming patent losses, but long-term investors could benefit from potential revenue and earnings growth as new products are launched [15].

Group 1 - The primary attraction for investors in Pfizer is its high dividend yield of 7.2%, significantly higher than the S&P 500's 1.2% and the average pharmaceutical stock's 1.3% [1] - Pfizer has a strong history of survival in the competitive pharmaceutical sector, boasting a market capitalization of $135 billion and over 100 years of operation [2] - The company has a track record of investing in new drug development and has also engaged in acquisitions to enhance its drug pipeline, as evidenced by its recent agreement to acquire Metsera for approximately $4.9 billion [3][4] Group 2 - Despite the attractive dividend yield, Pfizer faces challenges, particularly a looming patent cliff that could impact its revenue [5][6] - Key drugs such as Ibrance, Eliquis, and Vyndaqel are set to lose patent protections between 2027 and 2028, prompting Pfizer to strengthen its drug pipeline through acquisitions like Metsera [7] - The company's high dividend payout ratio raises concerns about the sustainability of its dividend amidst these challenges [8]

Group 1 - Pfizer has a significant dividend yield of 7.1%, which is much higher than the broader market's yield of 1.2% and the average healthcare stock's yield of 1.7% [1] - The stock price of Pfizer has declined by 55% since late 2022, raising concerns about the sustainability of its high yield [1][4] - The decline in stock price is attributed to a shift in consumer trust towards drug makers, particularly affecting Pfizer due to its involvement in vaccine production [4][5] Group 2 - Pfizer is one of the largest pharmaceutical companies globally, with a strong history of drug development and sales [3] - The company is facing a "patent cliff," with significant drugs losing patent protection starting in 2027, which could lead to revenue declines [6] - Pfizer's recent acquisition indicates its efforts to navigate current challenges and invest in new drug development [7][8]

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Core Insights - Johnson & Johnson's (JNJ) immunology drug Stelara lost patent exclusivity in the U.S. in 2025, significantly impacting sales and profits [1][3] - Several biosimilar versions of Stelara have been launched, leading to a substantial decline in its sales [2][3] - Despite the loss of exclusivity, J&J anticipates growth in its Innovative Medicine segment driven by other key products and new drugs [5][6] Sales Impact - Stelara sales dropped by 42.7% in Q2 2025, negatively affecting the Innovative Medicine segment's growth by 1170 basis points [3][11] - Sales of Stelara are projected to decrease from nearly $11 billion in 2023 to approximately $2.7 billion by 2027 [4] Future Growth Expectations - J&J expects to generate over $57 billion in sales from the Innovative Medicines segment in 2025, maintaining levels similar to 2024 despite Stelara's loss of exclusivity [6][11] - Key products like Darzalex, Tremfya, Spravato, and Erleada are driving double-digit sales growth, with Tremfya expected to become a $10 billion product [7][11] Competitive Landscape - J&J operates in the immunology and oncology sectors, facing competition from major players like AbbVie, Amgen, Novartis, and AstraZeneca [9] Stock Performance and Valuation - J&J's stock has outperformed the industry, rising 22.6% year-to-date compared to a breakeven performance for the industry [10] - The company's shares are trading at a price/earnings ratio of 15.78, slightly above the industry average of 14.78 [12] Earnings Estimates - The Zacks Consensus Estimate for J&J's 2025 earnings has increased from $10.83 to $10.86 per share over the past 60 days [13]

Core Viewpoint - Johnson & Johnson (J&J) has emerged as a standout performer in the healthcare sector, being the 10th best performing healthcare stock in the S&P 500, with a year-to-date increase of 21.5% despite the overall market downturn in healthcare [1][20]. Company Performance - J&J's success is attributed to its diversified business model, which includes a strong medical device division that accounts for 36% of sales, alongside its pharmaceutical operations [3][4]. - The medical technology division has shown steady growth, particularly in cardiovascular, orthopedic, surgery, and vision sectors, bolstered by significant acquisitions totaling nearly $30 billion [4]. - The pharmaceutical division, despite facing challenges such as the patent expiration of its key drug Stella, has managed to outperform sales expectations, with analysts projecting a 5% growth for the year [9][20]. Drug Portfolio - J&J's immunology business is performing well, with sales of a similar drug to Stella, TMFIA, increasing by 25% year-to-date [10]. - The oncology segment is particularly strong, with sales up 21% in the first half of the year, and projections indicating that J&J could become the leading cancer treatment company by 2030 with oncology sales reaching $50 billion [11][20]. - J&J has a robust pipeline with 13 drugs experiencing double-digit growth rates, which helps mitigate the impact of the loss of exclusivity for Stella [14][20]. Legal Challenges - J&J has been dealing with ongoing talc lawsuits, but recent changes in legal strategy have allowed the company to fight these cases individually, resulting in a better track record in court [16][17]. - The perception of the lawsuits has shifted, with some believing that the plaintiff's lawyers have overreached, contributing to a more favorable outlook for J&J [18][19]. Market Position and Valuation - J&J's stock is currently trading at a valuation below the market multiple, with a yield just under 3%, indicating potential for further growth [20]. - The company is on track to reach its all-time high of $186, with analysts suggesting it could surpass $200 in the near future [21].

Core Viewpoint - Pfizer is highlighted as a top dividend-paying stock with strong value, offering a forward dividend yield of 6.86% and a low forward P/E ratio of 8.3, making it an attractive investment option in the current market [4][6]. Dividend Performance - Pfizer has a robust dividend history, having paid 347 consecutive quarterly dividends and increased its dividend for 16 consecutive years [4]. - The company's management prioritizes maintaining and growing the dividend, despite a high payout ratio of around 90% [5]. Financial Metrics - The forward P/E ratio of Pfizer is significantly lower than the S&P 500's average of 22.8 and the healthcare sector's average of 16.5, indicating strong value [6]. - Analysts project a consensus 12-month price target for Pfizer that reflects an upside potential of over 13%, with a low PEG ratio of 0.86 suggesting confidence in its growth prospects [9]. Patent Cliff and Growth Prospects - Pfizer faces a patent cliff with several top-selling products losing exclusivity, including Eliquis and Ibrance, which generated $7.6 billion and $4.4 billion in sales, respectively [7]. - The company has a promising pipeline with 108 candidates, including late-stage programs and new products like Nurtec ODT and Abrysvo, which are expected to drive future growth [8]. Market Sentiment - Wall Street appears optimistic about Pfizer's ability to navigate challenges, as indicated by the consensus price target and low PEG ratio, suggesting that analysts are not overly concerned about the impact of patent expirations on growth [9].

Core Viewpoint - Pfizer's dividend yield of 7% is becoming more sustainable due to improved cash flow, lower leverage, and new product launches that can offset revenue losses from patent expirations [2][3][9]. Group 1: Free Cash Flow Improvement - Pfizer's free cash flow was $571 million in the first half of 2025, while dividends paid amounted to $4.9 billion, raising concerns about sustainability [3]. - The company expects improved cash flows in the second half of 2025, aided by a $2.1 billion tax payment and a payment to BioNTech [4]. - Pfizer anticipates $7.7 billion in savings from cost-cutting initiatives by the end of 2027, with a portion reinvested in pipeline development, potentially boosting free cash flow [5]. Group 2: Financial Flexibility and Leverage - Pfizer's capital allocation strategy prioritizes maintaining and growing the dividend, reinvesting in the business, and stock buybacks [6]. - The company has reduced its gross leverage ratio to approximately 2.7 from a previous target of 3.25, allowing for more financial flexibility [7]. - Improved cash generation post-Seagen acquisition enhances the ability to maintain and grow the dividend [8]. Group 3: New Products and Patent Cliff - Pfizer faces a patent cliff with several key drugs losing exclusivity, which poses a risk to revenue and dividend payments [9][10]. - However, strong revenue growth from recent product launches and acquisitions is expected to offset these losses [12]. - Notable products include Elrexfio, projected to become a standard treatment for multiple myeloma, and Sigvotatug vedotin, targeting non-small-cell lung cancer [12][13].