Though the stock market got a recent boost from solid third-quarter earnings reports and positive economic data, concerns surrounding the continuing spread of COVID-19, high inflation, and supply chain crises have been…
raising questions about the sustainability of the uptrend.
Furthermore, the Fed has signaled that it will likely begin tapering its $120 billion in monthly purchases of Treasury bonds and mortgage-backed securities next month. Amid this environment, investors could turn toward dividend-paying mega-cap stocks to hedge their portfolios against short-term market volatility by ensuring a steady income stream.
So, we think it could be wise to invest in mega-cap stocks Pfizer Inc. (PFE – Get Rating), The Coca-Cola Company (KO – Get Rating), Merck & Co., Inc. (MRK – Get Rating), and Novartis AG (NVS – Get Rating) because of their market dominance and solid long-term growth prospects. Their current dividends yield is 3% or more.
Pfizer Inc. (PFE – Get Rating)
New York City-based PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas. In addition, the company is involved in the contract manufacturing business. Its market capitalization is $240.92 billion.
On October 15, 2021, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) positively opined about PFE’s Abrocitinib, to treat moderate to severe atopic dermatitis (AD) in adults. Michael Corbo, Ph.D., Chief Development Officer, Inflammation & Immunology, Pfizer Global Product Development, said, “The CHMP’s positive recommendation brings us closer to our goal of helping people living with moderate to severe atopic dermatitis in Europe find relief.”
PFE’s revenues increased 92.4% year-over-year to $18.98 billion in the second quarter of 2021. While its net income increased 59.4% year-over-year to $5.56 billion, its EPS came in at $0.98, up 58.1% year-over-year.
The company began paying dividends in 1989. In the last three years, PFE’s dividend payout has grown at 6.4% CAGR. While PFE’s four-year average dividend yield is 3.6%, its current dividend translates to a 3.6% yield. On September 23, 2021, PFE announced a 39 cent fourth-quarter 2021 dividend, payable on December 6, 2021.
Analysts expect PFE’s revenue and EPS to come in at $703.15 billion and $35.8, respectively, for its fiscal year 2021. In addition, its EPS is expected to grow at 106.7% per annum over the next five years. Over the past nine months, the stock has gained 18.6% in price to close yesterday’s trading session at $42.97.
PFE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
PFE has an A grade for Value, and a B grade for Growth and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #10 of 202 stocks. Click here to see the additional POWR Ratings for Sentiment, Momentum, and Stability for PFE.
Click here to checkout our Healthcare Sector Report for 2021
The Coca-Cola Company (KO – Get Rating)
Beverage company KO in Atlanta, Ga., manufactures, markets, and sells various non-alcoholic beverages worldwide. It operates through a network of independent bottling partners, distributors, wholesalers, retailers & bottling-distribution operators. Its market capitalization is $239.66 billion.
On October 22, 2021, KO joined hands with Tech Partners to create a Bottle Prototype made from…
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