Current Dividend Yield: 3.7%
Performance So Far in 2012: +10%
Pfizer (NYSE:PFE) outperformed the market nicely in 2011 with one of the best returns in the entire Dow Jones — 23% in gains, to be precise. And while performance cooled early in the year, the stock has come roaring back since February as defensive investments like health care return to favor. It’s now outperforming the broader Dow Jones Industrial Average.
Yes, long-term challenges at Pfizer are the same as the risks that persist across all of Big Pharma — looming patent expirations, challenges from generic medications and the frantic race to lock up patients in emerging markets. But the goose still is laying golden eggs for shareholders in the form of 22-cent quarterly disbursements, with dividend payments dating back to 1901.
Looking forward, the company has a decent research pipeline with some up-and-coming drugs that could rotate in to prop up revenues. Most importantly for dividend investors, the company has $29 billion in cash on the books. Even if revenue hits a hiccup across 2012 — as it did in fiscal 2011 when it slid from $67.8 billion to $67.4 billion — the cash is there to preserve this juicy dividend.
Note: Pfizer reports earnings July 31.