Pfizer (PFE)
Pfizer (PFE) develops and markets medicines for humans and animals worldwide. Some of its be
It’s true that health care in the U.S. faces some strong headwinds. Government regulations make getting a drug to market incredibly time-consuming and expensive. Lawsuits can be incredibly damaging to sales, reputation, and stock prices. And of course the recession can’t help.
They’ve got some strong tailwinds too though. They spend massively on research and development. Sure that hurts in the short-term, but the benefits can be huge in the long-term. Also remember that Pfizer is an incredible marketing machine–and that’s on a worldwide basis. How much more medicine will China and India consume as their wealth increases? Finally, we have the demographics of the U.S. population. I think we can count on increasing use of medicines here in the U.S.
Now a lot of that is forward looking, and therefore perhaps in question. What is not in question is that at a current price of $16.65, Pfizer has an indicated yield of 7.6%. A yield like that should make the wait for a turnaround in share price less painful. What do you think?
Update 1/30/09
Dividend cut makes the Dividend Guy say it’s time to bail. What do you think?