Pfizer (NYSE:PFE) has been gaining a lot of momentum recently with its share price having risen almost 7% since the 24th of January. The stock has been riding the biotech wave since the complex bottomed back in November but also has traded strongly since it announced its fourth quarter results at the end of January. Although the company missed earnings expectation in Q4 due to established products missing sales estimates, I still maintain the market is underestimating future earnings growth of Pfizer which is just over 5% per annum over the long term. This cautiousness to a certain extent may be warranted. Pfizer has struggled to keep up with peers in recent times with respect to new product launches and pending patent losses of Viagra & Lyrica also haven't convinced the market as of yet that meaningful earnings growth is ahead of us.
I believe the pipeline is stronger than consensus believes but it is not only this area that has attracted me to this stock. I continue to like this sector as I feel its fundamentals are robust, especially when you consider the sustained M&A activity that is present in this area. Pfizer's share price won't go to the moon but I believe there is strong downside protection here mainly due to the company's sheer size and diversification. I think what dividend investors need to take into account here is that there are companies nowadays (which don't have dividend aristocrat status) that are much better contenders for long term growth. Pfizer I feel is still feeling the ill effects of cutting its dividend back in the great recession and it is only slowly building its reputation once more in the dividend landscape. Here are three more strong reasons we will remain long Pfizer.
