Looking for Cheap Income Stocks? Why Pfizer Belongs on Your Shortlist Right Now
Pfizer is a highly respected drug company facing normal industry headwinds.
Overview
Shares of Pfizer (NYSE: PFE) have fallen more than 50% from their late 2021 highs. That massive drawdown has pushed the dividend yield up to a historically high 6.9%. To put that yield into perspective, the S&P 500 index (SNPINDEX: ^GSPC) has a yield of roughly 1.1%, and the average pharmaceutical stock's yield is around 1.5%. As a dividend stock, Pfizer looks historically cheap and relatively cheap. Here's what's going on and why you might want to add this drug maker to your shortlist.
Companies don't end up with outsize yields for no reason. Pfizer has several major patent expirations coming up. When a blockbuster drug loses patent protection, generic competition typically enters and revenues decline. This is why drug companies are always on the lookout for new drugs.
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Originally published at www.fool.com.