Headquartered in New York and founded in 1849, Pfizer Inc (NYSE:PFE) is one of the world's largest pharmaceutical firms, with annual sales of about $50 billion. The company is engaged in discovering, developing and manufacturing of healthcare products. Prescription drugs and vaccines account for almost 90% of PFE's sales. Top sellers include the meningitis vaccine Prevnar 13, the impotence drug Viagra, and Lyrica for epilepsy and some forms of neuropathic pain. The company sells products globally with international sales accounting for about 60% of total sales.
PFE just recently made a comeback to the CCC-list, a list of dividend growth stocks with at least 5 consecutive years of dividend increases. PFE was dropped from the CCC list in 2009 following a dividend cut. At the time, the company was a Dividend Champion with a 41-year streak of dividend increases. Of course, now PFE is a Dividend Challenger.
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PFE is the 8th stock that I'm transferring from my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO), Proctor & Gamble (NYSE:PG), Kimberly-Clark (NYSE:KMB), AbbView (NYSE:ABBV), Dominion Resources (NYSE:D), W.P. Carey (NYSE:WPC) and Toronto-Dominion Bank (NYSE:TD).
In the process, I've added $676.53 to DivGro's projected annual dividend income and $877.92 in past dividends to DivGro's total dividend tally.
| 2012-03-02 | Bought: 70 shares of PFE at $21.43 per share: | $ | 1,499.91 |
| 2012-06-05 | Dividend on 70 shares at 22¢ per share: | $ | 15.40 |
| 2012-09-05 | Dividend on 70 shares at 22¢ per share: | $ | 15.40 |
| 2012-12-04 | Dividend on 70 shares at 22¢ per share: | $ | 15.40 |
| 2013-03-05 | Dividend on 70 shares at 24¢ per share: | $ | 16.80 |
| 2013-06-04 | Dividend on 70 shares at 24¢ per share: | $ | 16.80 |
| 2013-09-04 | Dividend on 70 shares at 24¢ per share: | $ | 16.80 |
| 2013-12-03 | Dividend on 70 shares at 24¢ per share: | $ | 16.80 |
| 2014-03-04 | Dividend on 70 shares at 26¢ per share: | $ | 18.20 |
| 2014-06-03 | Dividend on 70 shares at 26¢ per share: | $ | 18.20 |
| 2014-09-03 | Dividend on 70 shares at 26¢ per share: | $ | 18.20 |
| 2014-12-02 | Dividend on 70 shares at 26¢ per share: | $ | 18.20 |
| 2015-03-03 | Dividend on 70 shares at 28¢ per share: | $ | 19.60 |
| 2015-06-02 | Dividend on 70 shares at 28¢ per share: | $ | 19.60 |
| 2015-09-02 | Dividend on 70 shares at 28¢ per share: | $ | 19.60 |
| 2015-11-16 | Bought: 30 shares of PFE at $33.58 per share: | $ | 1007.50 |
| 2015-12-01 | Dividend on 70 shares at 28¢ per share: | $ | 19.60 |
| Total Capital Invested | $ | 2,507.41 | |
| Total Dividends Received: | $ | 264.60 |
With this transfer, DivGro's projected annual dividend income increases by $112.00.
The following chart shows a 4-year history of PFE's share price and indicates when I bought shares. I'm quite happy with my PFE investment – so, far it shows annualized returns of 17%.
Source: Scottrade
Why PFE?
PFE has a 5-year track record of annual dividend increases and a much longer track record of paying dividends. As mentioned earlier, PFE was a Dividend Champion before losing that status with a dividend cut in 2009. Here are some other reasons I like PFE and why I decided to transfer the shares to DivGro:
- PFE has a 3-year dividend growth rate of 9.1% and a 5-year dividend growth rate of 5.4%.
- At the current price of $32.07, the stock yields 3.49%.
- PFE and Allergan's (NYSE:AGN) plan to merge will allow PFE to lower its corporate taxes by relocating to Ireland.
- Morningstar estimates fair value at $38, implying a 19% upside from the current share price.
- PFE has a strong pipeline with several successful launches recently. Specifically, Xeljanz is a potential game-changer in rheumatoid arthritis and Eliquis should develop into a blockbuster in atrial fibrillation.
Do you own shares of PFE? Do you think PFE is a good dividend growth prospect? Please share your comments below.
I really like PFE. I've been watching this stock all year. I want to buy, but I am heavily invested in GILD and AMGN. I have considered dropping some GILD and adding PFE. Anyway, enough about me :-). Nice buy
ReplyDeleteThanks for commenting, Investment Hunting -- I don't own AMGN, but I do have some shares of GILD that I would be transferring to DivGro soon... GILD is a newish dividend payer and has some excellent growth prospects. That's why I like it and would want to retain it!
DeletePFE is a great stock. I will probably be buying it in 2016
ReplyDeleteThanks for visiting and commenting and best of luck with your planned investment in PFE.
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