Pfizer was one of the first companies I invested in when starting my dividend growth portfolio. However, in retrospect, it may not have been one of my wiser moves. As of right now, Pfizer is facing a patent cliff in 2018, when many of the patents for their higher revenue drugs will expire. This will flood the market with generic versions of those drugs, resulting in lower earnings for Pfizer.
At the moment, Pfizer does have 83 drugs in their pipeline. This bodes well, because the number of drugs in their pipe today can help determine where PFE will be able to grow revenue and earnings in the future. A pipe with zero blockbuster potential drugs is obviously a bad sign. But, at the moment, Pfizer does seem to be in a good position to offset any revenue losses as a result of the patent cliff.
From an investing perspective, I would be cautious of Pfizer. Unfortunately I am already invested, but I caution those of you without a position to be careful and really do your homework (unlike me) before investing. Don’t get me wrong, Pfizer should continue to be a big player in the pharmaceutical sector, but your money may be better invested elsewhere. The recent dip created some great opportunities and I don’t want you guys making the same mistakes I have.Helping you guys learn from mistakes I’ve made (like this one) is the reason I started this blog. so, if you are thinking about investing in Pfizer, do your due diligence beforehand and know this is a medium risk stock (which directly contradicts the tenants of dividend growth investing).
For a deeper analysis of Pfizer (PFE), check out the video below
Full Disclosure: Long PFE