Pfizer stock deemed undervalued with strong dividend yield

Pfizer's stock may be a good buy in 2025, despite its struggles. The company is financially stable, and several reasons suggest it could provide a solid investment opportunity. Firstly, Pfizer is trading at a low price compared to its earnings. Many stocks are discounted due to high risks, but Pfizer’s low valuation does not match its financial health. The company expects to bring in $61 billion to $64 billion in revenue this year, which is steady compared to last year’s $63.6 billion. Currently, its price-to-earnings ratio is under 9. This is low compared to the average of nearly 18 for other healthcare stocks. Secondly, Pfizer offers a strong dividend yield of 6.7%, which is much higher than the S&P 500 average of 1.4%. This means it could attract investors looking for income in a shaky market. Pfizer generated $9.8 billion in cash flow last year, covering its $9.5 billion in dividend payments, suggesting that the dividend is safe. Thirdly, Pfizer is actively looking to grow through acquisitions. The CEO mentioned the goal to add $25 billion in revenue by 2030. Recent acquisitions have already contributed significant revenue, and the company is considering more strategic deals to enhance their product pipeline. Overall, while Pfizer may take time to boost its stock price, it holds potential. Investors willing to be patient could see major benefits from both share price increases and dividend income over time.