Is Pfizer Really the Best Bad-News Buy on the Market? Analyzing the Potential of This S&P 500 Dividend Stock

Rays of Sunshine Peeking Through the Dark Clouds

Several rays of sunshine are peeking through the dark clouds for Pfizer.

First, the company has been highly successful at winning approvals for new products and new indications for existing products.

• In 2023, Pfizer notched a record nine U.S. Food and Drug Administration (FDA) approvals for new drugs and vaccines.

The company projects that new product and indication launches made through the first half of this year will add around $20 billion in annual revenue by 2030.

Second, the big pharma company has been busy gobbling up smaller drugmakers.

• One transaction wasn't so small, with a $43 billion price tag for Pfizer's acquisition of Seagen.

The company thinks its business development deals will generate $25 billion in new annual revenue by 2030.

Third, Pfizer should have other new drugs on the way that weren't included in either of the previous two projections.

For example, promising cancer therapy disitamab vedotin and flu vaccine PF-07252220 are being evaluated in late-stage clinical studies.

The Best Bad-News Buy on the Market?

I can't leave out Pfizer's exceptional dividend yield of 6.3%.

The dividend is likely to increase, based on Pfizer CFO Dave Denton's comments during the company's fourth-quarter earnings call.

With such a high yield, Pfizer doesn't have to deliver much share-price growth to give investors attractive total returns.

Unsurprisingly, Pfizer's valuation also looks appealing.

• Shares currently trade at 12.7 times forward earnings.

By comparison, the forward earnings multiple of the S&P 500 healthcare sector is 18.5.

Is Pfizer really the best bad-news buy on the market? I think it just might be.Should you invest $1,000 in Pfizer right now?