Dividend stocks are great for several reasons. Some use the regular payouts they offer to complement their income, whether in retirement or otherwise, while others reinvest the money to boost long-term returns. Dividend stocks have generally outperformed their non-dividend-paying peers over long periods.
Clearly, this mode of investing has advantages, but if there’s one thing better than investing in dividend stocks, it’s investing in cheap dividend stocks. Let’s consider two companies that fit the bill: Pfizer (NYSE: PFE) and Viatris (NASDAQ: VTRS).
1. Pfizer
Last year, Pfizer’s revenue dropped by 42% year over year to $58.5 billion. The decline was due to the receding pandemic. Demand for Pfizer’s COVID-19 vaccine, Comirnaty, and its related medicine, Paxlovid, dropped off a cliff. Still, the drugmaker’s current slump won’t last forever.
Pfizer already has a plan to turn over a new leaf. Last year, it earned approval in the U.S. for seven brand-new products, more than double any of its competitors’ total for 2023.These products will eventually help Pfizer’s revenue start moving in the right direction.
It’s also worth noting that Pfizer’s underlying business, excluding its coronavirus portfolio, isn’t performing that badly: Revenue increased by a solid 7% year over year in 2023. Pfizer’s decision to join the COVID-19 market has been a net positive despite its current declining top-line. It became the company in the pharmaceutical industry to hit $100 billion in sales in 2023 thanks to it. The money it generated allowed it to invest in the future.
Pfizer made important acquisitions, including that of cancer specialist Seagen, for $43 billion. Seagen was already a successful oncology-focused biotech before having access to the kinds of funds Pfizer has. The newly formed entity under Pfizer should speed up innovation compared with what it would have been able to accomplish by itself. Pfizer plans on increasing the number of blockbuster cancer medicines in its portfolio to eight by 2030, up from five today.
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Of course, Pfizer is also active in many other…
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