Pfizer Inc. (NYSE:PFE) shares have risen around 12% this year, in step with the iShares US Pharmaceuticals index. With talk of another spinoff and strong sales growth, this big pharma stock looks like a buy on the surface. Let's look a little closer at these reasons to buy Pfizer -- plus a big reason to be nervous -- and see if it still has room to run.

Another successful spinoff ahead?

Rumors that Pfizer might cleave off its consumer-healthcare business into a separate company are beginning to materialize. The company hasn't made any commitments yet, but management officially disclosed it's exploring options for popular over-the-counter brands that could take the form of a spinoff.

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The company could simply sell, or keep, the underperforming segment, but I'll stick my neck out and predict a 2-for-1 deal in 2018. Zoetis, Pfizer's former animal health segment, has performed so well since becoming a separate company in 2013 that management had better come to the next shareholders meeting equipped with riot gear if a highly anticipated spinoff doesn't occur. 

In early 2013, Pfizer offered to exchange 0.99 shares of Zoetis for each share of the parent company. Since that offer ended, Zoetis shares have delivered an outstanding total return of about 123% versus a total return of just 49% for Pfizer shares over the same time frame.

In the first half of the year, international sales of Pfizer's consumer-healthcare products grew by an impressive 7% over the same period last year, but a slight majority of consumer health sales occured in the U.S., where they fell 2% in the first half. Pfizer's big competitor in this space, Johnson & Johnson (NYSE:JNJ), recorded a 4.4% rise in U.S. sales of its over-the-counter medicines over the same periods when Pfizer's were slipping.

There are plenty of possible explanations for the disparity, but it looks like Pfizer's core biopharmaceutical operations are drawing management's attention away from the underperforming consumer segment. If this is the case, Pfizer's CEO was right to suggest "there is potential for its value to be more fully realized outside the company."

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What's working

A possible spinoff isn't the only reason to consider buying Pfizer right now. The company's more recently launched drugs are catching fire. Second-quarter sales of breast cancer pill Ibrance shot up 66%, to a $3.4 billion run rate, and its just one of three blockbuster drugs in Pfizer's lineup that grew by 50% or more during the period.

While products on pharmacy shelves push up total sales in the quarters ahead, new drug candidates in development could keep the party going for many years to come. At the beginning of August, Pfizer's pipeline boasted a whopping 32 programs in late-stage clinical trials, plus 12 awaiting regulatory reviews.

One of those programs, talazoparib, is in a late-stage trial with breast cancer patients. Results from earlier studies encouraged analysts to predict more than $2 billion in peak annual sales if it eventually earns an approval. Pfizer spent around $14 billion to acquire the candidate, along with other drugs from Medivation in 2016. If results from the ongoing trial continue to impress, the company's decision to splash out on the acquisition will look brilliant -- but that brings us to the biggest concern for Pfizer shareholders -- poor merger and acquisition (M&A) execution.

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What isn't working

In 2015, Pfizer shelled out around $17 billion for Hospira and its stable of biosimilar drug candidates. Unfortunately, Hospira operations have run into trouble that should have been avoided. In June, the company received its second complete response letter from the Food and Drug Administration (FDA) for a biosimilar version of Amgen's red blood cell booster, Epogen. 

Novartis earned approval for its biosimilar version of Epogen over a year ago, but the FDA shot down Pfizer's application twice, citing issues at manufacturing plants it acquired from Hospira that include vials of antibiotics contaminated with pieces of cardboard. A handful of Hospira plants incited the FDA to issue similar warnings before Pfizer took over, but it looks like management ignored them. The violations that derailed its Epogen biosimilar were cited during inspections that took place more than half a year after Pfizer completed the acquisition.

A nice price

I think Pfizer could be a great stock to buy, but the recent Hospira embarrassment is hardly the company's only example of poorly executed acquisitions, or attempts, in recent years. In 2014, the pharma offered AstraZeneca $118 billion, which would have been a staggering premium for a company that earned just $3.5 billion in 2016 and expects core earnings to fall further this year. 

If you're of the opinion the serial offender has somehow rehabilitated itself, though, the stock looks like a bargain. Pfizer shares have been trading at just 14.3 times this year's earnings estimates. That's well below the average stock in the S&P 500, which currently commands a forward multiple around 19.7 times forward estimates.

Pfizer shares also offer a juicy dividend that makes it an attractive stock for retirees looking to boost their income streams. The distribution offers a 3.5% yield right now and appears well funded. The company used just 56.5% of the free cash flow it generated over the past year to make the last four payments. That suggests the company should have no problem raising payments a bit faster than its bottom line, which Wall Street insiders expect to expand by 5.8% per year for the next five years.

At recent prices, Pfizer's a buy, albeit a cautious one.

Cory Renauer owns shares of Johnson & Johnson. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.