Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Pfizer Stock: A Top Bet for 2021?

By Cory Renauer - Jan 7, 2021 at 7:45PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new coronavirus vaccine isn't the only reason to buy this big pharma stock right now.

If you've spent any amount of time hunting for stocks to buy in 2021, Pfizer ( PFE -5.14% ) and its recently authorized coronavirus vaccine probably caught your attention.

Pfizer and its partner BioNTech ( BNTX -18.67% ) rapidly developed a new vaccine to prevent COVID-19. This is an enormous achievement expected to generate more than $10 billion in top-line sales for the collaboration partners this year, and then sharply taper off in 2022. That's nothing to sneeze at, but it's important to realize Pfizer already expects more than $40 billion in total revenue this year.

Accurate pipette work

Image source: Getty Images.

Over the past 12 months, Pfizer's profitable operation generated a whopping $10.3 billion in free cash flow, and 2021 was already shaping up to be a great year before the Food and Drug Administration (FDA) authorized its COVID-19 vaccine. Sales of Vyndaqel, a rare-disease treatment Pfizer launched in the U.S. in 2019, more than doubled year over year to reach an annualized $1.4 billion during the third quarter. 

Late last year, Pfizer spun off UpJohn, its post-market-exclusivity segment, which merged with Mylan to form Viatris. The sale to Mylan netted Pfizer $12 billion in net proceeds that can be used to make dividend payments and invest in tomorrow's potential new sources of revenue.

Pfizer has raised its dividend every year since 2009, and investors who have held their shares over the past decade have seen their payouts double in size. At recent prices, the stock offers a 4.2% yield that you get to keep no matter what happens to Pfizer or the economy at large.

Pfizer is an established pharma giant, but its shares aren't going to double overnight. Still, it's a top bet for investors who can't or won't take big risks with their money. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$51.48 (-5.14%) $-2.79
BioNTech SE Stock Quote
BioNTech SE
BNTX
$279.83 (-18.67%) $-64.23
Viatris Inc. Stock Quote
Viatris Inc.
VTRS
$12.44 (1.97%) $0.24

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.