Dividends and Growth From Pfizer

There’s a lot to like about Pfizer (NYSE: PFE) these days. For starters, there’s diversification, which expands Pfizer’s growth opportunities while reducing its risk. Back in 2000, one drug, Lipitor, accounted for 17 percent of Pfizer’s total revenue. Six drugs generated almost half of the company’s total revenue. Today, Pfizer’s top-selling product, pneumococcal conjugate vaccine Prevnar/Prevnar 13, makes up less than 12 percent of Pfizer’s total revenue. The company’s top six products produce less than a third of total revenue. Pfizer is tackling many areas, such as cardiovascular diseases, infectious diseases, central nervous system disorders, diabetes, autoimmune diseases, rare diseases and cancer. Drug companies’ futures are tied to their pipelines, and Pfizer’s is strong, with more than 90 clinical programs — close to half of which are either in late-stage development or in the regulatory approval process. The company is aggressively developing partnerships and making strategic acquisitions, too. The two big buyouts last year of Medivation and Anacor allowed Pfizer to pick up prostate cancer drug Xtandi and eczema drug Eucrisa. Each of these acquired drugs could bring in annual revenue of $2 billion or more. Pfizer has also been returning a lot of money to shareholders in the form of stock buybacks and dividends. Its payout recently yielded 3.8 percent. With its broad portfolio and pipeline of potential, Pfizer appears to be a value hiding in plain sight.