As one of the world's largest pharmaceutical companies, Pfizer (PFE -1.82%) makes many of the most in-demand medications across the globe, netting more than $49 billion in trailing revenues in the process.

Pfizer is profitable, loaded with more than $11 billion in cash, and flush with new products on the horizon. But potential investors should be aware that Pfizer's stock hasn't beaten the market over the last decade, nor has it always performed favorably against its competitors. Further, many questions remain about the impact of the company's plan to sell Upjohn, its ailing generic medication manufacturing business.

Is Pfizer's stock due for a turn to faster growth, or should investors expect its weakness to continue? In my view, Pfizer's stock will benefit from the Upjohn sale because it will allow the company to shed an underperforming business unit. However, Pfizer will still need to bolster its collapsing earnings growth if it wants its stock to be a lucrative investment moving forward. Let's check out how Pfizer plans to deliver for its investors in the next year to see how realistic a return to growth might be.

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Pfizer faces a challenging moment

The first factor to consider regarding Pfizer's prospects is the state of its earnings, which is relatively poor -- year-over-year quarterly earnings contracted by 32.1% in the second quarter. Revenues also contracted by 11% on a quarterly basis, led by a 31% decline in operational revenues from Upjohn in the second quarter.

The only silver lining in Pfizer's most recent earnings report, released July 28, is that its biopharma revenues increased by 4% to reach $9.8 billion -- hardly enough to offset revenue crashes elsewhere, though the company still expects the segment to continue to grow in the future.

Pfizer isn't scheduled to complete its sale of Upjohn until closer to the end of the year, so its third-quarter earnings may reflect another massive revenue contraction. Keep in mind as well that the sale has already been deferred once as a result of the pandemic, so additional delays might occur.

Once Pfizer has dumped Upjohn, it will be one step closer to its newly stated goal of being a smaller and more innovative pharma company. By curbing its participation in the intensely competitive generic drug market, the company will be free to focus on its core value-generating activity: discovering and commercializing new drugs. 

This will probably be favorable for investors in the long term, but not necessarily in the form of stock value appreciation. According to the management team, Pfizer's strategy for rewarding its shareholders will now pivot toward providing reliable dividend returns, and it has no plans to perform stock repurchases this year. Pfizer's trailing dividend rate is $1.48 per year, which works out to a yield of a bit over 4%. At present, it's unclear if or when Pfizer's new emphasis on dividends will result in an actual dividend hike; the payout was last raised in January.

Will shareholders be satisfied with Pfizer's new direction?

Aside from the Upjohn transaction, Pfizer has four drug products currently awaiting regulatory approval. It also has 23 pipeline projects in the final phase of clinical development, so it's reasonable to expect that the company will secure at least a handful of additional new product launches over the next few years. Perhaps most importantly of all, Pfizer is also developing a coronavirus vaccine candidate (in partnership with BioNTech), and its project is one of the leading candidates so far.

Once Pfizer is free of Upjohn's dragging effect on its revenues, these new medicines will deliver fresh growth which will reflect positively on its bottom line. If the company's biopharma segment continues to expand at its current rate of 4%, it's feasible that Pfizer as a whole could return to slowly growing its revenues as early as the first half of 2021.

Overall, the outlook for Pfizer's stock is cautiously optimistic over the next few years, but that's contingent on the Upjohn sale proceeding as planned. If the deal falls through and Pfizer is stuck with an unprofitable generics manufacturing business, it will struggle to follow through on its plan to reward shareholders with dividends, and the stock will probably contract.

On the other hand, if Pfizer's powerful drug development pipeline is successfully returned to the center of its focus, it might start to make up for its years of stock underperformance -- but probably not before the end of the year.