#7 - Pfizer (NYSE:PFE)
Events such as the Covid-19 pandemic tend to have ripple effects that aren’t appreciated for many years. That’s why Pfizer (NYSE:PFE) is an intriguing buy for 2023 and beyond.
Yes, the company will still be a significant company when it comes to delivering a sufficient supply of Covid-19 vaccines. But, as controversial as the company’s use of mRNA technology may have been, it is likely to become a standard way of developing treatments for a range of medical conditions. And in September, Pfizer initiated a Phase 3 study for an influenza vaccine based on mRNA.
And that is only part of the company’s pipeline which includes 112 candidates with 27 in Phase 3 trials.
PFE stock currently trades with a P/E ratio of 9.45% and, unlike many biotechs; the company has sufficient earnings to issue a dividend which currently has a yield of 3.26%. And with a payout ratio of just over 30%, that dividend looks pretty secure – and likely to continue growing.
About Pfizer
Pfizer Inc discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally. The company offers medicines and vaccines in various therapeutic areas, including cardiovascular metabolic, migraine, and women's health under the Eliquis, Nurtec ODT/Vydura, Zavzpret, and the Premarin family brands; infectious diseases with unmet medical needs under the Prevnar family, Abrysvo, Nimenrix, FSME/IMMUN-TicoVac, and Trumenba brands; and COVID-19 prevention and treatment, and potential future mRNA and antiviral products under the Comirnaty and Paxlovid brands.
Read More - Current Price
- $25.65
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $32.92 (28.4% Upside)
The price-to-earnings ratio is considered one of the benchmark metrics for analyzing stocks, but it does have its limitations. The primary limitation being that it only reflects a moment in time. Many investors will choose to look at a company's price-to-earnings growth (PEG) ratio as a supplementary metric.
The PEG ratio divides a stock's P/E ratio by the anticipated growth rate in its earnings per share. This gives investors an idea of how much growth investors can expect from a stock in years to come.
During bull markets, P/E ratios tend to get inflated as investors bid stocks higher. So it's important to make sure that you look at a stock's P/E ratio in relation to other stocks in its sector. However, you should be careful to not exclude a stock simply because it has a higher P/E ratio than the sector average because sometimes these stocks merit that ratio because they are considered best in class.
However, in bear markets P/E ratios drop as stocks move back to historically normal levels. This is why investors should hunt for stocks with low P/E stocks in market downturns because these will frequently be more attractive to investors.
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