Pfizer Inc (PFE)

They face a patent cliff. Are buying companies and working on their drug pipeline to offset that, but this is their main problem. Little growth is expected in coming years. Pays an attractive yield and trades at a low PE, though.

It has no earnings momentum. You get only the 6.66% dividend.

Attractive dividend. More of a marketing engine (and it's been really successful) than a drug development company. Once that Iran conflict trade comes off, defensives will be likely recipients. If you own, he probably wouldn't sell here; keep collecting the dividend, and perhaps sell later on strength.

Not everything in your portfolio will be going gangbusters at all times. Leadership rotates and takes turns.

It pays a yield of 6.4% and has a good pipeline of drugs in development.

Wasted $$ after the pandemic. Now refocused. Blockbuster drugs are tapped out, needs a new one. They will find one, and you could make a lot of money.

Meanwhile, you collect the yield of 7% (which is probably good for the next 3 years). If they don't find a monster drug by then, dividend will probably be cut. He's taking the risk.

Hit their patent cliffs PFE is cutting costs, but that goes only so far. Prefers other areas of healthcare.

 It reports Tuesday. Pays a great dividend, but doesn't see a blockbuster drug to move the needle. 

It over-earned during Covid which was not sustainable. It is trying to make up for lost revenue now. It is a high quality company but needs a near term catalyst. Its pipeline investments will take a while. Dividend yield is attractive. Look for more attractive health care companies with both dividend and growth opportunities.

Better stocks in pure pharma. PFE has little in their pipeline. Any gains they make will be in cutting costs or buying a company. 

Trading at 8-9x PE. Problem (as for many pharma companies) is that the drugs that make the most amount of $$ are social drugs (Prozac, weight loss) rather than drugs that solve the actual problem (each cancer drug is very niche). Historically, traded at high multiples because people thought they were growth companies; but pharma is not as growthy as people thought. Yield is 6%.

He owns NVO and LLY, and those are his preferences. Drugs with these two will generate lots of money over the next few years.

PFE is very cheap at 8X earnings with a 6.78% dividend. But it has been cheap for a while. It still has uncertainty over Covid revenue, and its full year guidance raise (2.5%) was not so impressive. EPS is still expected to fall marginally in 2026 ($3.11 to $3.00). With lower interest rates ahead (probably) and a possible economic slowdown (always possible) and possible sector rotation, there will come a time when the stock performs much better. We would of course like to see higher growth. For patient investors, we think it is buyable, but we would stress the need for patience here. The government push towards lower drug prices may keep sentiment negative for a longer period of time.
Unlock Premium - Try 5i Free

Little momentum, good dividend, but didn't like their update yesterday. A weak hold.

This bottomed with the market in April and has risen with the mark since then. He wants to see this break $26; if so, it will take off. Be patient. Most money is made by sitting on your hands.