If we had to pick a leader in the race to get an effective Covid-19 vaccine to the public, a likely front-runner would be pharmaceutical giant Pfizer (NYSE:PFE). Many traders would probably agree with this, and some of them are holding Pfizer stock because they believe that the company will remain a leader in the vaccine rollout race.
Not everybody has such a bullish sentiment in regard to Pfizer stock, however. Perhaps they don’t see the stock as a strong value because the share price has gone up substantially since the March 2020 bottom.
Or, maybe the skeptics are worried about the less-than-ideal distribution of Covid-19 vaccines in general. And admittedly, it will likely be a while before much of the public will have access to the vaccine developed by Pfizer and German partner BioNTech (NASDAQ:BNTX).
The concerns are understandable, but they’re not insurmountable. Even given the speed bumps on the the path to vaccine distribution, Pfizer stock can still be a worth holding on to.
A Closer Look at Pfizer Stock
First, let’s take a glance at the finer details of Pfizer stock. For generations, this has been considered a safe, steady buy-and-hold investment to make.
Is it still safe and steady in 2021? I would say so. Pfizer stock has recovered nicely since it bottomed out at $26.45 back in March. As of Jan. 22, the stock price settled comfortably at $36.55.
Granted, there was a wild pop-and-drop in November and December. During those months, Pfizer stock vaulted to $43.08 but quickly returned to the more typical $36 area.
That pop-and-drop was a textbook lesson in not chasing after a stock after a vertical move. In any case, Pfizer stock still looks like a “slow and steady wins the race” kind of stock. This is reflected in the stock’s low five-year monthly beta of 0.64.
Adding to the safety aspect of Pfizer stock is its consistent dividend. Currently, the stock’s forward annual dividend yield is 4.27%. That’s quite good for a blue-chip stock. Thus, long-term investors can collect some decent yield along the way as they hold their Pfizer shares.
A Historic Day
91-year-old United Kingdom resident Margaret Kennan has earned a place in the history books. On Dec. 8, she was the first person to receive Pfizer’s Covid-19 vaccine shot.
British Health Secretary Matt Hancock went so far as to mark the occasion as “V-day.” It certainly felt like an auspicious start to the global vaccine rollout. What could possibly go wrong?
Actually, a number of hurdles have impeded the distribution of Covid-19 vaccines generally, and therefore Pfizer’s in particular. Writer Keith Speights concisely sums up the two main issues:
One is just lack of coordination between the federal government and the states… Then there’s just a money issue… where quite a few states and local health officials are just saying, we don’t have enough money to do all we need to do.
Facing the Fears
Speights’s points are duly noted. Now, I’m not here to debate whether the federal government did a good job in coordinating the vaccine rollout with the individual states or not.
Rather, I’m just going to look at the fiscal aspects of owning Pfizer stock. And according to Morgan Stanley analysts, Pfizer is projected to generate $9.3 billion in combined Covid-19 vaccine revenues in 2022 and 2023.
Plus, the analysts expect Pfizer to collect $19 billion in Covid-19 vaccine revenues this year.
Hence, if you’re fearful that Pfizer’s bottom line will suffer, you can probably relax. Rest assured, this pharmaceutical icon will be just fine.
The Bottom Line
Will the distribution of Covid-19 vaccine shots be perfect? Far from it, so Pfizer stock holders must be patient as the rollout issues might persist for a while.
Nevertheless, Pfizer stands to generate very strong revenues over the next several years from its Covid-19 vaccine. Besides, Pfizer stock doesn’t appear to be vastly overpriced, and there will be nice dividend payouts to collect while you wait.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
