According to the U.S. Centers for Disease Control and Prevention (CDC), COVID-19 cases, hospitalizations, and deaths have been on the rise in the past few weeks. Much of this new activity -- which is especially prevalent in areas with low vaccination rates -- is attributable to the highly transmissible delta variant of the SARS-CoV-2 virus that causes the disease. And while the number of people vaccinated against COVID-19 continues to rise, this new wave of infections hasn't gone unnoticed in the investment community.

Is another market downturn on the way? Maybe, maybe not. Either way, if the delta variant continues to wreak havoc, investing in companies that have developed coronavirus vaccines could pay handsome dividends down the road. And among these companies, there is one that (in my view) remains an excellent option for most investors focused on the long term: Pfizer (NYSE:PFE).

Looking at the coronavirus vaccine market

The first reason Pfizer is the best of the bunch is simply that it's the leader in the coronavirus vaccine market, at least in terms of revenue. In the first half of the year, the pharma company reported $11.3 billion in sales from its vaccine, BNT162b2. The company also said that it expects roughly $33.5 billion in sales from BNT162b2 in 2021, which is much higher than the $26 billion Pfizer had projected in its first-quarter earnings release. 

A healthcare worker holds a glass vial labeled Covid-19 Vaccine.

Image source: Getty Images.

How does that compare to its peers? Moderna (NASDAQ:MRNA) is the only rival that even comes close to Pfizer, with estimated sales of $19.2 billion for its vaccine, mRNA-1273 (this estimate will, in all likelihood, be revised upward). Then there's the company Pfizer partnered up with to develop BNT162b2, BioNTech (NASDAQ:BNTX). Under the terms of the agreement between the two entities, Pfizer holds the commercial rights to the vaccine in most countries (excluding Germany, Turkey, and several countries in Asia). BioNTech said it expected 12.4 billion euros (about $14.6 billion) in revenue from BNT162b2 based on production as of May.

The other players in this space are much further behind. Johnson & Johnson expects vaccine sales of roughly $2.5 billion this year. Meanwhile, AstraZeneca, whose vaccine ran into trouble because of clotting side effects, and Novavax, whose candidate has yet to be granted Emergency Use Authorization in the U.S., are unlikely to measure up to Pfizer in terms of revenue.

The need for booster shots (or other ways to deal with new developments like the delta variant) could give Pfizer yet another boost. Not to mention the company thinks the COVID-19 vaccine market will become seasonal, like the flu. Given that Pfizer has already built a leadership position in this segment, and it continues to work on ways to maintain this position, both the present and the future look great for Pfizer in the coronavirus vaccine space.

The valuation argument

Despite its No. 1 position in the coronavirus vaccine race, Pfizer is actually not that expensive a stock compared with its peers in this market, as the chart below shows: 

PFE PE Ratio (Forward) Chart

PFE PE Ratio (Forward) data by YCharts

Pfizer's forward price-to-earnings and forward price-to-sales ratios are lower than those of its competitors. Why? It's hard to say. My own opinion is that the market is still underestimating Pfizer's prospects. Whatever the reason, the fact that Pfizer is cheaper than its peers is yet another strong argument in its favor.

More to offer

It's also important to remember that Pfizer isn't just a coronavirus vaccine play. In the second quarter ending June 30, the company's revenue (excluding sales of BNT162b2) came in at $11.1 billion, a 10% year-over-year increase. That was thanks to products such as anticoagulant Eliquis, whose sales jumped by 16% to $1.5 billion.

Pfizer also boasts a rich pipeline with dozens of programs, and investors can expect the pharma giant to bolster its lineup every year. The company's current lineup and pipeline, including BNT162b2, will continue to deliver revenue and earnings growth for the foreseeable future.

Let's not forget that in November 2020, Pfizer spun off its off-patent medicine unit Upjohn, which merged with the company formerly known as Mylan and became Viatris. Upjohn's declining sales had become a dead weight on Pfizer's bottom line, and by shedding this unit, Pfizer is now laser-focused on its more profitable biopharma business. The company's top and bottom lines would have continued growing at a good clip even without the addition of BNT162b2. 

Last but not least, Pfizer is an excellent stock to consider for income-oriented investors. The company's dividend yield of 3.66% compares favorably to that of the S&P 500 at 1.35%.

Given that shares of Pfizer are currently fairly valued, I expect the company to outperform the market in the long run. For all those reasons, Pfizer remains my top coronavirus vaccine pick on the market. 

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.