Since the bull run of March 2009 commenced, Pfizer (PFE -3.85%) has closely tracked the performance of the S&P 500, both of which are up about 155% over the last five years. But can Pfizer deliver outperformance in future? Or will it continue to mirror the index?

News flow
News flow surrounding Pfizer's pipeline in 2014 has been somewhat mixed. For example, management continues to be upbeat regarding its breast cancer drug, palbociclib, as well as a pneumonia vaccine called Prevnar 13. The latter was reported to have met its objectives in February in a trial that tested the effectiveness of the vaccine in 85,000 patients aged 65 or older against pneumonia. In addition, Pfizer's breast cancer drug has the potential to increase revenue by around $3 billion per annum should it be approved by the FDA. Developments on both drugs have the potential to impact shares positively during 2014.

But 2014 has not been all upbeat for Pfizer. For instance, its potential treatment for an advanced form of lung cancer, dacomitinib, missed its main goals in two late-stage studies in late January. The drug failed to show a statistically significant improvement in progression-free survival in a study comparing it with the treatment erlotinib. Moreover, it also missed the aim of prolonging overall survival when compared to a placebo in the second study. The results from a third study are expected later this year and could impact Pfizer's share price.

Relative valuation
Pfizer seems to offer good value for money at current price levels. For instance, using the EV/EBITDA metric -- which divides a company's enterprise value by earnings before interest, tax, depreciation, and amortization -- Pfizer compares favorably to sector peer, Bristol-Myers Squibb (BMY -8.51%). While Pfizer's EV/EBITDA ratio is 9.1, Bristol-Myers Squibb's is 22.8 -- highlighting the considerable difference in valuations between the two stocks.

A key reason for this is the strength of Bristol-Myers Squibb's share price over the last five years. While Pfizer is up 155%, Bristol-Myers Squibb is up over 200%, and this is in part evidenced by an EV/EBITDA ratio that is far in excess of that of Pfizer. Furthermore, news flow for Bristol-Myers Squibb has been upbeat in 2014, with the company announcing that a phase 3 study of a combination of Yervoy and immunotherapy treatment nivolumab will commence before the end of 2014.

This is very positive news for Bristol-Myers Squibb because pressure had been mounting on the company to state when it would progress to a phase 3 trial with the drug -- especially after a scientific-research team from Dana-Farber Cancer Institute and Johns Hopkins put together statistics regarding patients with melanoma who have taken nivolumab that were highly encouraging. Further developments surrounding nivolumab could have a major impact on the future share price of Bristol-Myers Squibb.

A potentially better opportunity?
While Pfizer's EV/EBITDA ratio is more attractive than that of Bristol-Myers Squibb, sector peer AstraZeneca's (AZN 5.38%) EV/EBITDA ratio is yet more appealing. While Pfizer's is 9.1, AstraZeneca's EV/EBITDA multiple is 8.7, meaning that shares in the U.K.-listed stock are cheaper by this metric than those of Pfizer.

News flow for AstraZeneca has also been upbeat recently, with the FDA approving a drug in late February to treat rare and potentially fatal disorders involving the loss of body fat. The drug, Myalept, has been developed in partnership with Bristol-Myers Squibb and has been approved as a replacement therapy to treat complications caused by leptin hormone deficiency in patients with congenital generalized lipodystrophy. This involves a loss of fat tissue, leading to low levels of leptin, which can ultimately cause diabetes and pancreatitis. In addition, the FDA also approved the Bydureon Pen, which is the first and only once-weekly medicine for adults with type 2 diabetes and provides powerful blood glucose level reduction.

Looking ahead
While AstraZeneca's EV/EBITDA ratio is lower (and, therefore, potentially more attractive) than Pfizer's, this doesn't detract from Pfizer's appeal to me. Similarly, Bristol-Myers Squibb may not be as attractively priced as its two peers but still represents a sound investment opportunity.

Furthermore, while Pfizer's news flow of late has been rather mixed, the company still looks all-set to have a strong 2014. Sure, it has tracked the index over the last five years, but a relatively attractive EV/EBITDA ratio of 9.1 seems to highlight that Pfizer could be undervalued. As such, it could have a great 2014.