Pfizer (PFE); Offers high yield, solid dividend increases (8.4%), & excellent pipeline

pfe

Pfizer’s (NYSE: PFE) dividend was increased by 7% with an overall yield above that of the S&P 500 Index at 3.49%. Pfizer is a research-based, global biopharmaceutical company engaging in the discovery, development, manufacture, and sale of healthcare products. Portfolio includes medicines, vaccines, medical devices, and various consumer healthcare products.

Pfizer manages operations through three segments: Global Innovative Pharmaceutical (GIP), Global Vaccines, Oncology and Consumer Healthcare (VOC), and Global Established Pharmaceutical (GEP). Top-selling prducts in 2015 included: Prevnar, Lyrica, Enbrel, and Lipitor. Pfizer has paid dividends on a consecutive basis for 23 years. Pfizer currently ranks 4th in yield within the large cap healthcare – major drug manufacturer category.

Pfizer has maintained a solid three-year growth rate of dividends of 8.4 percent. The quarterly dividend for the March payment will be $0.30 versus the prior year rate of $0.28 per share.  Pfizer Inc. does qualify as top member of our Top 100 Dividend Stocks (see below).

top-100

The dividend will be paid at the new higher rate on March 2, 2016, to shareholders of record at close of business on February 5, 2016. Pfizer is currently priced at $32.26. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
2/5/2016 0.3
11/4/2015 0.28
8/5/2015 0.28
5/6/2015 0.28
2/4/2015 0.28
11/5/2014 0.26
7/30/2014 0.26
5/7/2014 0.26
2/5/2014 0.26
11/6/2013 0.24
7/31/2013 0.24
5/8/2013 0.24
1/30/2013 0.24
11/7/2012 0.22
8/1/2012 0.22
5/9/2012 0.22
2/1/2012 0.22
11/8/2011 0.2
8/3/2011 0.2
5/11/2011 0.2
2/2/2011 0.2
11/4/2010 0.18
8/4/2010 0.18
5/5/2010 0.18
2/3/2010 0.18

Analysis of Pfizer Inc. is based upon our five key criteria, which include; 

Category Value Score
Dividend Yield 3.49%  50
Dividend Growth (3-6 year avg) 7.10%  159
Forward P/E 11.49  24
S&P Financial Rating AA  40
Beta 0.85  75
Total Score    348

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr lowest Yield % 5 yr max Yield %
3.49% 8.4% 5.9% 7.5 4.21 1.65 4.23 2.96% 4.57%


Quantitative Analysis;   

Positives;

  • Pfizer’s dividend yield is above that of the S&P 500 Index.
  • Pfizer maintains a 3 year dividend growth rate of 8.4%.
  • Pfizer maintains a credit rating of AA. This is investment grade.
  • Pfizer’s forward P/E ratio is just over 11, below that of the market.
  • Pfizer has paid out a dividend consecutively for the past 23 years.
  • Pfizer maintains a beta of 0.85, lower than the average company.

Negatives;

  • Pfizer is trading at a higher than average price/sales (P/S) basis.
  • Pfizer’s current dividend yield (3.49%) is below it’s five-year average historical dividend yield of 3.77%.

Based upon its high dividend yield, solid dividend growth, high credit rating and low beta, Pfizer Inc. qualifies as one of our Top 100 Dividend Stocks and is ranked #1. 

Pfizer Dividend Yield Chart (Click to enlarge)
PFE2

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

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