Tomahawk, WI 9/17/2013 (BasicsMedia) – Pfizer Inc. (NYSE:PFE) is a major biopharmaceutical company with a global presence. It also doubles up as a biopharmaceutical research company with five segments through which its operations are managed. These segments include nutrition, animal health and consumer healthcare, established products and emerging markets, specialty care and oncology as well as primary care. The company has been quite busy acquiring new businesses and companies with the intention of retaining its position as a market leader. The stock has traditionally done well.
PFE Stock Has Very Good Track Record
It is next to impossible trying to say with certainty whether this or that stock will continue doing as brilliantly as it has done in the past. Stocks such as PFE have traditionally been very good performers and investors have been aptly and amply rewarded for their investments. It remains one of the few stocks which you can rely on for its high dividend yield. The capital appreciation on its share price has hovered around the 64% mark within the last two years or so. There is no doubt that it enjoys a stellar past, but what about the future? Will its future be as stellar too?
PFE Stock Delivers in Capital Appreciation and Dividend
If you are on the lookout for a stock which delivers on a regular basis both in terms of capital appreciation and dividend, none comes anywhere near PFE. One might be tempted to think that this has always been the case with PFE all throughout its history. If you are in this category of investors, then let me inform you that you are wrong. There was a 10-year period when the stock never enjoyed anything else other than negative news. This took place when the company failed to properly determine threats posed by biotechnology firms and generic drugs.
Pfizer remains a highly valued company, with a worth reported to be around $178 billion and above. The earnings growth is forecasted to be around 3% within the next 5-year period. This is not something to excite any investor worth his/her salt. I don’t think Pfizer is in a place where it will make what I refer to as ‘easy money’ like it did in the past. That era is probably gone although if one of the drugs which PFE still has in the pipeline was to become a major hit, then the stock would benefit a great deal from such a scenario and investors would be the happiest.
PFE’s Fair Valuation
After a thorough review of this stock, I have come to the conclusion that its valuation is quite fair. Secondly, I don’t expect this stock to continue enjoying returns of 64% within the next couple of years, similar to what it enjoyed in the recent past. However, its 6% dividend yield is still enough to convince me that PFE remains a high dividend yield company, especially considering its huge size. If you are interested in a secure stock, which allows you to enjoy what is considered a decent dividend yield, I would advice you to look no further than Pfizer Inc.
However, the upside potential of PFE is not great and if you want to invest in a stock based on its share price growth, then this would be a wrong one for you.