Best Dividend Stock in Big Pharma, PFE

Time to get pick our best dividend stock in big pharma.  There are a lot of big pharma stock to choose from.  We all want the best dividends for our money.

Best Dividend Stock in Big Pharma

Reducing the Choices, Do You Pay a Dividend?

There are a lot of pharma stocks to pick from.  Since there is so many pharma companies out there, we will need to reduce our choices.  The first round, we eliminate any that do not pay a dividend.  There are many pharma companies out there at different stages, such as startups, small and growing, and many more.  Eliminating all that do not pay a dividend will greatly reduce our list.  Since there is still a lot of dividend pharma stock, we are not going to list them all here.

Reducing the Choices, Dividend Status

Since there is still a ton of choices out there, we will need to reduce our choices even more.  Since we are huge fans of dividend growth stocks, we will reduce our choices even more.  We will only look at companies that are Dividend Aristocrats or 100 Year Dividend Payers.  This leaves us with the following Big Pharma Dividend Stocks:


  • Johnson & Johnson (JNJ)
  • Eli Lilly (LLY)
  • Pfizer (PFE)

Dividend Yield

Of course, dividends are important for any best dividend stock category.  It should be no surprise current dividend yield is a category on our site.  Johnson & Johnson (JNJ) and Eli Lilly (LLY) are about 2.7%, and Pfizer (PFE) is 3.8%.  Pfizer (PFE) WINS with the Largest Dividend Yield.

Valuation

We want the best for our money, and we want a good price.

Trailing PE

We want a good value for our shares.  Eli Lilly (LLY) and Pfizer (PFE) are both around the 30 PE and Johnson & Johnson (JNJ) is about a 20.  Johnson & Johnson (JNJ) WINS with the Cheapest Trailing Earnings.

Future PE

We also want the predicted future earnings of the companies to look good.  Johnson & Johnson (JNJ) and Eli Lilly (LLY) have a future predicted PE of about 17.  Pfizer (PFE) has the lowest at a Forward PE of 12.  Pfizer (PFE) WINS with the Cheapest Future PE Value.

PS (Price to Sales)

Because accounting methods can have an impact on earnings from year to year, we also like to compare PS.  Which is like PE, except it looks at revenue instead of earnings.  Pfizer (PFE) WINS with the Cheapest PS at 3.9.

Stock Price

% Below 52 Week High

We like also like buying at a discount to the 52-week high.  Eli Lilly (LLY) and Johnson & Johnson (JNJ) are down about 5% from the 52-week high while Pfizer (PFE) is down 10%.  Pfizer (PFE) WINS the cheapest value from the 52-week high.

A Quick Table to Review

Winner in each spot is highlighted.

Stock Dividend Yield Trailing PE Future PE Price to Sales % Below 52 Week High
JNJ 2.7% 20 16 4.5 6%
LLY 2.6% 31 18 4.0 4%
PFE 3.8% 29 12 3.9 10%

 

And the Best Dividend Stock in Big Pharma

Pfizer (PFE) is the Winner with getting 3 out of the 4 categories.

What About New Drugs?

I did not include new drugs and patents.  These companies are constantly researching new drugs, losing patents, buying other companies, and everything else that is included in this space.  Drug profits come in waves.  We are looking to get the best dividend stock in big pharma for the next 10 or 20 years.  Not the best for the next year.  By choosing from Dividend Aristocrats and 100 Year Dividend Payers, they have a great track record of paying dividends and being best of breed dividend companies.

Big Pharma Purchase

On 2/21/17, we purchased 15 shares of Pfizer (PFE) for $513.72 including those druggy big phrama commissions.  This will add $19.20 to our dividend growth account.

What is your best dividend stock in big pharma?  Do you like my pick of Pfizer (PFE)? Please feel free to add your thoughts below in the comment section.

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Disclosure:

  • PFE – We own shares.
  • JNJ and LLY – We do not own shares.

 

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4 thoughts on “Best Dividend Stock in Big Pharma, PFE

  1. nice writeup. I think all three are good stocks. I own JNJ & PFe and have no plans to sell. In fact , I have been adding to my JNJ position as it is small. I think having healthcare exposure right now is critical because the baby boomer population will be utilizing health care services more and more over the next few years. Thanks for sharing.

    -Brian

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