PFE  Pfizer Inc.

Exchange

NYSE

Sector

Consumer Durables

Industry

Major Pharmaceuticals

Market Cap.

204.02B

Vuru Grade

60.55/100

Current Price

$33.62
+0.00 (+0.00%)

Growth Price

$25.69
Overvalued by 23.60%

Stability Price

$11.98
Overvalued by 64.37%

Company Metrics

  • P/E 28.66
  • P/S 3.86
  • P/B 3.22
  • EPS 1.17
  • Cash ROIC 13.13%
  • Cash Ratio 0.79
  • Dividend 1.28 / 3.81%
  • Avg. Vol. 25.14M
  • Shares 6.07B
  • Market Cap. 204.02B

Company Description

Pfizer Inc., a biopharmaceutical company, offers prescription medicines for humans and animals worldwide. The company's Biopharmaceutical segment's provides Lipitor for elevated LDL-cholesterol levels in the blood; Enbrel for rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, and ankylosing spondylitis; Lyrica for post-herpetic neuralgia, diab... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Pfizer Near A Technical Breakout
Seeking Alpha - 21 hours ago
Pfizer's share price won't go to the moon but I believe there is strong downside protection here mainly due to the company's sheer size and diversification. I think what dividend investors need to take into account here is that there are companies ...
Pfizer Inc. (PFE) Closes Flat on the Day for February 17 - Equities.com
The FY2017 Earnings Estimate for Pfizer, Inc. Issued By SunTrust Banks (PFE) - DailyQuint
Better Buy: Gilead Sciences, Inc. vs. Pfizer Inc.
Madison.com - Feb 18, 2017
Pfizer's prospects have improved for several reasons. Several products in the company's current lineup are performing exceptionally well.
The PGGM Investments Has $112552000 Position in Gilead Sciences, Inc. (GILD) - DailyQuint
How Will Pfizer Inc. Fare Under President Trump?
Motley Fool - Jan 21, 2017
In 2015, Pfizer received Medicare payments of roughly $2.7 billion for Lyrica and Prevnar. That comprised less than 5.5% of the company's total revenue. Pfizer didn't own Xtandi until it acquired Medivation last year. Medicare shelled out around $791 ...
Pfizer swings to 4Q profit after rough year, hikes 2017 view
The Seattle Times - Jan 31, 2017
FILE - In this Monday, Nov. 23, 2015, file photo, a woman passes Pfizer's world headquarters, in New York. Pfizer Inc. (PFE) on Tuesday, Jan. 31, 2017, reported fourth-quarter net income of $775 million, after reporting a loss in the same period a year ...
Pfizer's profit misses as vaccine sales lag, costs rise - CNBC
Pfizer, Inc. (PFE) Ex-Dividend Date Scheduled for February 01, 2017 - Nasdaq
Pfizer Inc.: Invest For Attractive Valuation And The 4% Dividend Yield
Seeking Alpha - Feb 9, 2017
Pfizer Inc. (NYSE:PFE) is one of the world's largest pharmaceutical firms with sales exceeding $50 billion. The company is currently attractively valued at a blended P/E ratio of 13.3, offering a current dividend yield of 4%.
Could Pfizer now be a better pick for investors than Johnson & Johnson?
Motley Fool - Jan 27, 2017
Probably the best investing argument for Pfizer is that it appears to be effectively using its capital to position the company for long-term growth. It's no secret that Pfizer's legacy established products business is struggling, primarily because of ...
Pfizer: Another Reason To Stay Long
Seeking Alpha - Feb 9, 2017
There were already plenty of reasons like Pfizer (NYSE:PFE) as a long-term investment but management just gave investors another reason to add to that list when it was recently announced that the company entered into a $5b accelerated share repurchase ...
Pfizer May Be Another IBM
Seeking Alpha - Feb 3, 2017
The stock trades near 30X earnings as if it were about to rebound with great growth. Yet, instead it just may be a lumbering giant making weak decisions not designed to provide rapid organic growth.
Pfizer misses on earnings
Business Insider - Jan 31, 2017
(Reuters) - Pfizer Inc, which closed its $14 billion acquisition of Medivation Inc in September, reported a lower-than-expected profit, hit by lower demand for products set to go off patent.
Pfizer (PFE) Q4 Earnings Lag, Sales Top; '17 Sales View Soft - Yahoo Finance
The Ronald Blue & Co. LLC Has $1170000 Position in Pfizer, Inc. (PFE)
DailyQuint - 3 hours ago
Ronald Blue & Co. LLC reduced its stake in shares of Pfizer, Inc. (NYSE:PFE) by 7.9% during the third quarter, Holdings Channel reports.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PFE to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PFE's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$33.62 Current Price

$25.69 Growth Price (DCF)

Overvalued by 23.60%


Growth Rate Assumed by Market: 12.66%


Future Free Cash Flow Growth Rate: 2.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$11.98 Stability Price (EPV)

Overvalued by 64.37%


Discount Rate: 15.0%

$23.01 Book Price

Overvalued by 31.55%


Satisfactory Cash Return on Invested Capital over the past 5 years

PFE has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely PFE could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

PFE has created $13.13 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 18.58B 15.73B 16.30B 15.30B 13.02B
divided by
Invested Capital 133.18B 124.47B 116.33B 111.52B 114.77B
Cash ROIC 13.95% 12.64% 14.01% 13.72% 11.34%

Excellent Return on Equity over the past 5 years

Over the past 5 years, PFE has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

PFE has generated $16.55 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 10.05B 14.60B 22.07B 9.17B 6.99B
divided by
Stockholders' Equity 82.19B 81.26B 76.31B 71.30B 64.72B
Return on Equity 12.23% 17.96% 28.93% 12.86% 10.79%

Excellent Business Performance over the past 10 years

PFE has been able to maintain profitability in good times and bad. This could mean PFE has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

PFE has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 15.54B 11.47B 16.54B 15.38B 9.94B 18.58B 15.73B 16.30B 15.30B 13.02B

Weak Balance Sheet

PFE's financial position is not ideal. The key is to check whether PFE is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 27.71B 25.48B 23.73B 25.97B 28.01B 26.76B 32.71B 32.41B 36.12B 23.29B
Current Assets 46.95B 46.85B 43.08B 61.67B 60.47B 57.73B 61.42B 56.24B 57.70B 43.80B
Total Assets 114.84B 115.27B 111.15B 212.95B 195.01B 188.00B 185.80B 172.10B 169.27B 167.46B
Current Liabilities 21.39B 21.84B 27.01B 37.23B 28.61B 28.07B 28.62B 23.37B 21.63B 29.40B
Total Liabilities 43.48B 50.26B 53.59B 122.94B 107.20B 105.81B 104.54B 95.79B 97.97B 102.74B
Stockholder' Equity 71.36B 65.01B 57.56B 90.01B 87.81B 82.19B 81.26B 76.31B 71.30B 64.72B
Current Ratio 2.20 2.15 1.59 1.66 2.11 2.06 2.15 2.41 2.67 1.49
TL-to-TA 0.38 0.44 0.48 0.58 0.55 0.56 0.56 0.56 0.58 0.61

Low or No Reinvestment of Profits over the past 10 years

PFE has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to PFE operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 49.67B 49.66B 49.14B 40.43B 42.72B 46.21B 54.24B 69.73B 72.18B 71.99B
Retained Earnings Growth - -0.02% -1.04% -17.74% 5.66% 8.18% 17.38% 28.56% 3.51% -0.25%

Varying Competitive Advantage over the past 10 years

PFE likely has a competitive advantage which prevents other companies from entering or competing in their industry. However, there is a substantial variation in their Net Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$21.83 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 19.34B 8.14B 8.10B 8.64B 8.29B 10.05B 14.60B 22.07B 9.17B 6.99B
divided by
Revenue 48.37B 48.42B 48.30B 50.01B 67.81B 67.43B 58.99B 51.58B 49.61B 48.85B
Net Profit Margin 39.98% 16.82% 16.78% 17.28% 12.22% 14.91% 24.75% 42.79% 18.48% 14.30%

Strong Pricing Power over the past 10 years

PFE has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$81.20 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 40.73B 37.18B 40.18B 41.12B 51.53B 58.31B 47.65B 42.00B 40.03B 39.20B
divided by
Revenue 48.37B 48.42B 48.30B 50.01B 67.81B 67.43B 58.99B 51.58B 49.61B 48.85B
Gross Margin 84.21% 76.79% 83.20% 82.23% 75.99% 86.49% 80.79% 81.42% 80.69% 80.25%

Low Capital Intensity over the past 10 years

PFE has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that PFE may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

15.78% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 2.05B 1.88B 1.70B 1.21B 1.51B 1.66B 1.33B 1.47B 1.58B 1.50B
divided by
Net Income 19.34B 8.14B 8.10B 8.64B 8.29B 10.05B 14.60B 22.07B 9.17B 6.99B
Capital Expenditure Ratio 10.60% 23.08% 20.99% 13.94% 18.25% 16.52% 9.09% 6.64% 17.27% 21.41%

Very Strong Dividend History over the past 10 years

PFE has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests PFE is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid 6.92B 7.98B 8.54B 5.55B 6.09B 6.23B 6.53B 6.58B 6.61B 6.94B
divided by
Shares Outstanding 7.27B 6.94B 6.75B 7.05B 8.07B 7.87B 7.51B 6.90B 6.42B 6.26B
Dividend Paid Per Share 0.95 1.15 1.27 0.79 0.75 0.79 0.87 0.95 1.03 1.11
Price at Year End 20.08 18.59 15.36 16.86 16.61 21.42 24.89 30.69 31.38 32.75
Dividend Yield 4.74% 6.18% 8.24% 4.67% 4.54% 3.70% 3.50% 3.11% 3.28% 3.39%

Strong History of Stock Buybacks over the past 10 years

PFE has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 7.27B 6.94B 6.75B 7.05B 8.07B 7.87B 7.51B 6.90B 6.42B 6.26B
Stock Bought Back - 4.83% 2.80% -4.19% -12.74% 2.59% 4.82% 8.89% 7.33% 2.67%
Share your thoughts about PFE

Sign Up or Log In to start contributing!


Discussion
Sort By:
4
Posted by sameer  (on March 21, 2012)
For value investors, NAV is the most important followed by EPV... This company is overvalued in both.

Furthermore, its a large cap stock so there's probably a lot of investor speculation, herding and rebalancing of portfolios that is going to affect the value.

Plus the pharma market is starting to lose all their patents without putting any new drugs out ...

I wouldn't invest ...
1
Posted by Robert.T  (on March 21, 2012)
Yeah, there are definitely going to be some carcasses once this melee around patent expiration finishes.

Pfizer is an interesting case. They've been around forever and it's hard to imagine that they'll just disappear. At the same time, the facts don't look promising. For example, they recently put out a (much hyped) rheumatoid arthritis treatment and it's not so hot. 55% of doctors said it wouldn't replace drugs they currently prescribe patients. Here's the link to the full article: http://www.pharmalot.com/2012/03/pfizers-rheumatoid-arthritis-pill-not-a-slam-dunk/
1
Posted by pbanik  (on August 18, 2013)
Louis Navellier rates the stock a buy:
http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=PFE
Of course, he's a growth investor, so he will be more favorable towards stocks that exhibit growth than ones who don't.

ValuePro thinks the intrinsic value of the stock is $55.03 It's trading just above half that. http://www.valuepro.net/index.shtml Enter ticker symbol PFE and then Click on Get Baseline Valuation button to the right of where you enter the ticker symbol.

I think if you can find undervalued growth stocks, you can get the best of both worlds, or better yet, dividend paying undervalued growth stocks. I think if you wait you can get in at a better entry point. The US stock market seems to be falling lately, which is why I say you can be rewarded if you wait. The quarterly earnings growth for PFE is phenomenal if you look at the numbers:
http://finance.yahoo.com/q/ks?s=PFE+Key+Statistics
The yield is above 3% right now, which is above average. If it drops under $25, I will probably initiate a position.
1
Posted by dodam85  (on May 9, 2012)
no, i don't think pfe is overvalued. Pfe is $25.34
-1
Posted by quantumcanuck  (on March 20, 2012)
This is by far the most highly rated stock of the DOW. Good pick IMO