The new HHS nomination, and his views on vaccine, and generally the incoming administration’s disdain for vaccine, there is lot of pessimism around this name. PFE has significant vaccine portfolio, beyond COVID.
They have publicly committed to the dividend, which is $1.68 per year, and committed to increasing dividends, which they have done already for 2024. They are not buyback company. The below shows the last 5 year gross dividend. So they are going to be paying out $10 B in dividends. A big burden and unlike buyback, is a commitment.
Not sure where is the bottom. If RFK jr nomination fails, for whatever reason, this could immediately bounce back. Of course there are other Pharma names also have gone down and will bounce back.
The cash flow can barely support it. And they have $67 B in debt. They are trying to monetize some of their external investments and pay the debt. But they have $3.2 B interest burden, and the interest is actually going up…
They need to find some growth, or clarity on the vaccines.
I’m hold Lilly. Same problem. Down significantly. Very high PE. Investors worry about competition in wt loss drugs. Investing heavily in new capacity but not due til next year. Then add in the RFK Jr risk.
if you own, it is a different issue. Your cost basis, other considerations will play into that. We are not hedge funds, where every position is, if you cannot buy at today’s price then it is a sell, philosophy doesn’t apply to us.
The weight reduction, addresses so many other health issues. There are lot of adjacent areas LLY can go. So you may want to consider optionality, expansion into other countries, etc.
This is not an easy choice. taxable vs non-taxable, how big this position is relative to the entire portfolio are some of the parameters I used.
Twice, last year, I did some deep in the money calls’ and quickly they got called during the dividend time. While annualized return is not bad… but, I was not expecting to get the money back and find another buy-write opportunity. This is not unique to PFE, this is a problem with many high dividend stocks, like VZ. There are bigger players in these names… they are good at it. I have also learned right around dividend time, the stocks generally rally, , so you should sell because, right after dividend, they go down.
“Now” is the operative word here. They are almost sure to cut it if things don’t begin to improve over the next few years.
I’ve owned Pfizer on and off for decades and it hasn’t enjoyed those good lipitor and viagra days for quite a long time. I bought some in 2008 and sold it pretty quickly for a quick short-term gain. And more recently (last year) I made the mistake of buying some between 35 and 40. At this point I don’t have much faith in it, but you never know with pharma, one or two blockbusters can change the whole trajectory for a decade or two.
, so you should sell because, right after dividend, they go down. 