It's been a mixed year for pharma giant Pfizer (PFE -0.11%). While the company's coronavirus-related portfolio continues to hit it out of the park, its shares have dropped by 13% since the beginning of the year. True, that's better than the performance of the S&P 500, but Pfizer is severely lagging similarly sized pharma giants, including AbbVie, Eli Lilly, and Johnson & Johnson, among others. The good news is that there are excellent reasons to get in on this top drugmaker at current levels. Here's why Pfizer looks like a buy right now. 

PFE Chart

PFE data by YCharts.

Planning for the future

Pfizer's detractors may point to the fact that its non-coronavirus lineup isn't performing well. In the first quarter, the company's revenue jumped by an impressive 82% year over year to $25.7 billion. That's more than half the company's 2020 revenue of $41.9 billion. However, excluding its coronavirus products, revenue increased by a meager 2% year over year in the first period.

Since it is difficult to predict how demand for COVID-19 vaccines and therapies will shape up after this year, the rest of Pfizer's lineup may need to pick things up starting next year to keep its top line moving in the right direction, and that is by no means guaranteed. This reasoning may partly explain Pfizer's relatively weak performance on the stock market year to date. Still, it is unlikely that Pfizer's coronavirus-related revenue will suddenly drop to zero.

COVID-19 is probably here to stay. According to some predictions, we could see a new wave of cases in the fall and winter.

The disease could become endemic, too, requiring people, especially those who are the most at risk, to get shots regularly, just as so many people do when it comes to the flu. Comirnaty and Paxlovid -- Pfizer's vaccine and therapy against the disease, respectively -- will continue to contribute to the company's top line. Even a fraction of their current sales would allow Pfizer to continue growing its revenue at a good clip compared to its pre-pandemic years.

True, sales might drop compared to 2021 and 2022 -- two highly abnormal years due to the state of emergency in which we found ourselves. But in the long run, Pfizer's top line would eventually settle on an upward trajectory, especially as it earns additional indications for its existing products and launches new ones on the market.

Thanks to its success in the coronavirus area, Pfizer's cash balance increased substantially, allowing it much more flexibility to prepare for the future. The company's free cash flow increased by 190% in the past three years to $31.8 billion. Pfizer is planning to be active in acquisitions, and it has already started making key moves in this department. Pfizer currently has 90 ongoing clinical trials divided more or less equally across all three stages.

A modest 25% success rate with its current phase 3 programs would yield seven approvals within the next two years (or so). Pfizer's pipeline will expand as it makes more acquisitions, which will only enhance its overall prospects.

More reasons to buy

After dropping along with much of the broader market this year, Pfizer's shares look attractive. The company's current forward price-to-earnings (P/E) ratio stands at just 7.7, while its price-to-earnings-growth (PEG) is at 0.087. The pharmaceutical industry's forward P/E is 13.7, while a PEG under 1 is considered good. In addition, Pfizer is an excellent stock for income-oriented investors.

The company offers a dividend yield of 3% -- much higher than the S&P 500's yield of 1.7%. With a low cash payout ratio of 27.7%, Pfizer isn't done rewarding shareholders with dividend increases, something it is accustomed to doing. The drugmaker has raised its payouts by 25% in the past five years.

Pfizer has a lot to offer between its low valuation and solid pipeline, a vast lineup that can perform well despite some investors' fears, and a juicy dividend. It's worth it to look beyond the current state of the market and hold onto this pharma stock for a while.