Current Dividend Yield: 3.4%
Performance So Far in 2012: +20%
Pharma stocks are mainstays for dividend investors, and Pfizer (NYSE:PFE) is one of the favorites. For instance, amid the quest for yield last year, the stock outperformed the market nicely in 2011 with one of the best returns in the entire Dow Jones in 2011 — 23% in gains, to be precise.
There were some setbacks for PFE earlier this year, such as in August when it abandoned a joint venture with J&J to developer an Alzheimer’s drug as poor results hit home. And of course, patent expirations hurt — most notably the recent departure of blockbuster Lipitor into the realm of generic competition.
But thanks in part to good numbers lately, PFE is now outperforming the broader Dow Jones Industrial Average so far in 2012. A big catalyst has been news of a recent animal health spinoff, as well as a big leukemia drug approval in September. Shares are up more than 8% in the past 30 days alone.
And big-picture, you can’t get more low-risk than healthcare stocks. People buy drugs no matter what the economy is like. Also, it’s hard to argue with the growth potential looming in a huge demographic shift provided by aging baby boomers. Thus, Pfizer remains a great long-term dividend play despite some challenges.
Pfizer reports earnings Oct. 30.