Does Pfizer’s (PFE) New 3.68% Dividend a Bargain for Shareholders


Pfizer Inc. (NYSE:PFE) was founded over 166 years ago as a chemical company, and in 1950, thanks to a drug called Terramycin, they set their path to becoming one of the world’s largest pharmaceutical companies. With close ot $50 billion in revenue annually, they aren’t going anywhere anytime soon. However, they do have one problem. What do they do with all of their extrra cash? Earlier this week they decided to use some of that cash to issue a 7 percent increase in their quarterly dividend, increasing from 28 cents per share to 30 cents, bringing investors an annual dividend return of 3.68% (based on yesterday’s closing price.

This has suddenly made Pfizer Inc. (NYSE:PFE) stock an attractive option for many hedge fund managers, and investors alike. A 3.7% return on any investment is fair, and then you add on the fact that the stock has almost tripled in the past 6 years, it’s hard to make a case against it.

Pfizer Inc. (NYSE:PFE) shares are trading up slightly in the pre-market this morning (up 0.12%), and the stock increased 0.03% or $0.01 during the last trading session, hitting $32.59. About 2,919 shares traded hands. PFE has declined 4.01% since May 14, 2015 and is downtrending. It has underperformed the S&P500 by 1.38%.

From a total of 11 analysts covering Pfizer (NYSE:PFE) stock, 7 rate it a “Buy”, 0 a “Sell”, and 4 a “Hold”. This means that 64% of the ratings are positive. The highest target price is $51 while the lowest target price is $34. The mean of all analyst targets is $42 which is 28.87% above today’s ($32.59) stock price. Pfizer was the topic of 17 analyst reports since July 29, 2015 according to the firm StockzIntelligence Inc. Barclays Capital initiated shares on December 1 with a “Equal-Weight” rating. S&P Research maintained shares with a”Hold” rating and a $40 target share price in their report from an October 28. Suntrust Robinson upgraded PFE stock in a recent report from November 25 to a “Neutral” rating. Cowen & Co upgraded the rating on October 20. Cowen & Co has a “Outperform” rating and a $43 price target on shares. Finally, Deutsche Bank maintained the stock with a “Buy” rating in a report they issued on an October 28.

The institutional sentiment increased to 1.07 in Q2 2015. It’s up 0.20, from 0.87 in 2015Q2. The ratio improved, as 78 funds sold all their Pfizer Inc. shares they owned while 689 reduced their positions. 83 funds bought stakes while 739 increased their total positions. Institutions now own 3.96 billion shares which is 7.29% less than the previous share count of 4.28 billion in 2015Q2.

Northeast Financial Consultants Inc holds 22.84% of its total portfolio in Pfizer Inc., equating to 1.43 million shares. Healthinvest Partners Ab owns 761,000 shares representing 14.14% of their total US portfolio. Moreover, Whitnell & Co. has 12.9% of their total portfolio invested in the company, equating to 1.04 million shares. The Arkansas-based Foundation Resource Management Inc has a total of 10.92% of their portfolio invested in the stock. New England Professional Planning Group Inc., a Rhode Island-based fund reported 286,282 shares owned.

Since March 6, 2015, the stock had 0 insider buys, and 1 insider sale for a total of $880,646 in net activity. Cangialosi Loretta V sold 24,704 shares worth $880,646. Olson Laurie J sold 26,000 shares worth $894,155. Hill Charles H sold 42,870 shares worth $1.50 million. Susman Sally sold 46,179 shares worth $1.57M. The insider Dolsten Mikael sold 58,298 shares worth $2.01 million.

Pfizer Inc. is a global biopharmaceutical company. The company has a market cap of $201.12 billion. The Firm is engaged in discovering, developing and manufacturing of healthcare products. It has 24.39 P/E ratio. The Company’s products include Lyrica, the Prevnar family of products, Enbrel, Celebrex, Lipitor, Viagra, Zyvox, Sutent, EpiPen, Toviaz, Tygacil, Rapamune, Xalkori, Inlyta, Norvasc, BeneFIX, Genotropin and Enbrel, among others.