Top Dividend Stocks #6: Pfizer (PFE)
Dividend Yield: 3.25%
YTD Performance: +4.60%
52-Week Return: +6.48%
Pfizer (NYSE:PFE), the world’s biggest pharmaceutical company with a market capitalization of almost $205 billion, has moved up two spots since our last edition of the top Dow dividend stocks.
PFE has garnered a lot of attention from the investment community lately after proposing a $100 billion dollar takeover of London-based biopharmaceutical company AstraZeneca PLC (NYSE:AZN). AZN rejected the offer at first, but PFE is still in pursuit of a deal. If completed, it would be the largest takeover of its kind in history.
The takeover would be advantageous to PFE for several reasons. The company would be able to significantly increase its product line in the areas of oncology and diabetes treatment, and it would also benefit via the distribution channels that AZN already has set up overseas.
Perhaps even more compelling for Pfizer, the proposed deal would enable PFE to put use the approximately $70 billion in overseas cash that would otherwise be subject to exorbitant corporate taxes if it was returned to the United States. Incorporating in the U.K. would ultimately lead to a more competitive tax rate for PFE, even if the company keeps in headquarters in the U.S.
PFE is up about 4.6% for the year to the $32 level, and just last week declared another dividend payout of 26 cents for the current quarter. That makes for an attractive dividend yield of 3.25% on a stock that trades with a P/E ratio of 18.6, which is right in line with its industry peers.