If you had invested a thousand dollars in the stock of Pfizer (NYSE: PFE) about ten years ago, you would probably be disappointed if you cashed out that money today. As of April 8, 2025, the company’s stock price was $22.05, quite a way down from its peaks. The $1,000 would now be worth some $840, a loss of 16% over 10 years, averaging an annualized decline of 3.4% per year.
The picture is even more grim if reinvestment of dividends into more Pfizer shares is considered. As a result of huge dividend payments from the company, reinvesting into additional shares shrinks the value to about $790, a total loss of 21%, leaving aside the initial investment. Reinvesting is smart in many cases, but not in this case.
What went wrong with Pfizer?
However, there have also been some other unfortunate developments in terms of key issues for Pfizer that will be outlined below. Most prominent include the drop in demand for Covid-related products such as vaccines and Paxlovid because they are now no longer seen as major income generators.
Additionally, many of these major selling drugs, such as Eliquis, Ibrance, Inlyta, Xeljanz, Xtandi, and Vyndaqel, are also approaching expiration of their patent protection from Pfizer, so when generics come on board, sales of branded drugs are usually undercut, thereby squeezing profits and diminishing investor confidence.
Does this imply that there is still hope for Pfizer’s future?
Despite its recent setbacks, Pfizer is not standing still. The company has more than 110 medicines and vaccines in development to show that it is still investing significantly in innovation. Last but not least, this $43 billion buyout of Seagen came as a surprise, especially because the company is known for selling cancer therapies. This will further bring Pfizer’s oncology portfolio to greater heights.
Pfizer’s gross margin maintenance remains healthy at 66.76%, while its dividend yield currently stands at an attractive 7.47%, thus making its stock appealing to income-focused investors. Also, given the price-per-sales ratio at only 2.5, Pfizer’s valuation looks even more attractive compared to its five-year average of 3.4.
Should you consider buying Pfizer right now?
The good news for prospective investors is that Pfizer has fallen off its pedestal, making its shares cheaper than they have been in years. If you are betting on a rebound—especially as Pfizer’s new pipeline matures—this could be a good entry point.
But this is also another opportunity to point out that Pfizer did not make The Motley Fool’s most recent top 10 recommended stocks. Netflix and Nvidia, which were in the same ranking as Pfizer, have turned $1,000 investments into hundreds of thousands of dollars since.
Bottom line
Ten years ago, whether or not you put $1,000 in Pfizer shares, you should be feeling the pain of performance in the back of your mind now. However, new investors might find the depressed valuation, dividend windfall, and yet another pipeline an opportunity. In any case, always perform due diligence and assess how a stock like Pfizer fits with your investment plans.
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