The COVID-19 pandemic has caused a huge amount of disruption across the world for the past 18 months or so, with many businesses crippled due to extensive closures. However, green shoots started appearing when talk of effective vaccines against the virus were on their way. One of the companies to come to the fore with a vaccine was Pfizer (NYSE: PFE). This article will look at if Pfizer stock is a good investment.
The bull case for Pfizer
The main bull case for Pfizer is its COVID-19 vaccine. As one of the leading pharma companies, it has been at the forefront of helping the world get back to normal. Pharma companies have already distributed billions of vaccine doses across the world, with many more to come. With talk that annual booster shots will likely be needed, Pfizer looks well-positioned for sustained good performance in this business segment for the coming years.
In 2021, revenue from the Pfizer vaccine is set to be about $33.5 billion. To put this into perspective, Pfizer’s total revenue last year was $41.9 billion. Therefore, Pfizer is benefitting massively from the rollout of vaccines.
As well as the COVID-19 vaccines, Pfizer is still focusing on releasing other types of medicines each and every year. The pandemic has not halted these efforts and it got three new approvals in Q2 2021. It has a good track record of bringing new medicines to the market to good effect.The company has also been trimming down areas of the business that are underperforming. This includes the spinning off of its Upjohn subsidiary which manufacturers generic drugs. Therefore, margins are expected to improve going forward. As well as an appreciating share price, investors are also expecting bigger dividend payouts going forward as a result of the company’s success in recent quarters. Therefore, it looks to be a good long-term prospect.
The bear case for Pfizer
Some people will point towards growing competition in the COVID-19 vaccination space as being something that will reign in Pfizer’s revenues in the coming years. Certain investors see the pandemic as being a black swan event that will only give Pfizer a temporary boost in revenue and profit. Therefore, they do not seem to think that a higher share price will be justified based on a long-term horizon.
So, should I buy Pfizer stock?
Pfizer stock looks to be a good long-term buy. It is well-positioned to take advantage of the COVID-19 vaccination rollout and booster programs in the coming years. It has strong fundamentals, a good portfolio of other medicines, and a strong dividend. Therefore, it is a good choice for people looking to get some exposure in the pharma sector.
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Who is the Pfizer CEO?
Albert Bourla has been the CEO of Pfizer since January 2019.
Does Pfizer pay a dividend?
Yes, Pfizer paid out $8.4 billion in dividends last year.
Is Pfizer profitable?
Yes, Pfizer generated a net profit of $9.6 billion in 2020.
Contributing Writer at MyWallSt
Andrew is a contributing writer to MyWallSt. He is a full-time finance writer, having spent time working in the industry. He studied Economics and Finance and has been fascinated with the financial markets since his teens. The first stock that Andrew bought was Apple, reflecting his love for its products.