COVID-19 is both contagious and deadly, and when a vaccine becomes available, billions of people worldwide may need to take it if economies are to reopen safely. This creates a gigantic opportunity for any company that can create an effective coronavirus vaccine.

Since the stock prices of many vaccine makers have already gone up a lot this year, investors may worry about buying at artificially high prices. But Pfizer (PFE) remains quite undervalued given its potential blockbuster vaccine candidate, which it's researching jointly with Germany-based BioNTech (BNTX -1.44%).

Let's look at three reasons long-term value investors should snatch up some Pfizer shares right now to be a part of its bright future.

Person in protective lab gear holding vial

Image source: Getty Images.

1. Encouraging results from its vaccine candidate

In phase 1 clinical trials, all participants who received the company's messenger RNA coronavirus vaccine, BNT162b2, developed neutralizing antibodies, which are small proteins that recognize certain components of a pathogen and prevent it from invading healthy cells.

Moreover, all participants also developed SARS-CoV-2-specific T-cell responses after dosage. T-cells recognize virus-infected cells and tell those cells to self-destruct, preventing the virus from spreading throughout the body. Unlike antibodies, which may disappear just weeks after dosage, T-cells can form memories of pathogens for months or years.

The experimental vaccine showed effects just seven days after a second dose, with results applicable to adults aged 18 to 85. Side effects were low, with fewer than 20% of participants developing mild to moderate fevers after administration. The vaccine candidate is currently undergoing phase 2/3 clinical trials, with data likely to be released within the next two months.

2. Government validation

Even before Pfizer's vaccine candidate made it past clinical trials, countries around the world were already placing their faith in its science. Currently, Pfizer has received orders from the U.K., Japanese, and U.S. governments for 30 million, 120 million, and 100 million doses of its experimental vaccine, respectively (subject to regulatory approval). The company will have the capacity to produce 1.3 billion doses of the vaccine in 2021.

For the U.S. deal specifically, each dose of the vaccine is priced at $19.50, with the option to secure 500 million further doses. Keep in mind that each participant received two doses of the vaccine candidate in the clinical trials in which it proved effective, which should greatly enhance its market opportunity (think 600 million doses for 300 million people). Pfizer and BioNTech will split the vaccine's gross profits and expenses equally via their partnership agreement.

3. Solid financials

Pfizer expects to generate between $48.6 billion and $50.6 billion in revenue for the full year and between $2.85 and $2.95 in earnings per share. Although these are marginal declines from last year's results, investors should note that Pfizer's shares are already cheap, at about 4 times price-to-sales and 13 times price-to-earnings. Assuming clinical trial success, the launch of its coronavirus vaccine late this year or in early 2021 will create substantial growth for its bottom line. The company's biosimilar, anti-cancer, and anti-blood-clot drugs have also been performing well, with revenue up over 30% year over year in these segments.

The company will reinvest up to $9 billion of its revenue this year in research and development. And if that's not enough, investors should note that Pfizer stock boasts an impressive dividend yield of 4%, which is more than covered by the company's cash flows per its 52% payout ratio.