Summary
- 10-year chart shows strong support for shares.
- 2019 earnings guidance was increased after the announcement of Q1 numbers.
- Volume continues to diverge from price in the daily and weekly charts.
- Looking for a portfolio of ideas like this one? Members of Elevation Code get exclusive access to our model portfolio. Start your free trial today »
Pfizer Inc. (NYSE:PFE) remains a core part of our portfolio for various reasons. The most significant reason is that shares have been consolidating for the best part of 10 months now. The majority of investors want their stocks to rally aggressively. However, astute long-term income derived investors prefer quality stocks, which could be out of favor at the time or simply consolidating. The reason for this is that compounding takes place much faster within a portfolio when the respective investor can buy extra shares aggressively either through the use of extra capital or by reinvesting the dividend proceeds in order to accumulate more stock.
Pfizer presently pays out a dividend yield of 3.55%. The firm reported its first quarter numbers on the 30th of April last. Both earnings and revenues came in ahead of expectation, which was encouraging, and 2019 profit guidance has increased. With respect to the dividend, some large changes in working capital adversely affected operating cash flow in the first quarter. Free cash flow for the first 3 months of the year came in at a low $1.08 billion as a consequence. Therefore, this is a trend we will be monitoring going forward.
