Pharmaceutical Company Offers 7 Years of Dividend Boosts
By: NED PIPLOVIC
A pharmaceuticals and biotechnology company offers seven consecutive years of dividend boosts and rewards its shareholders with a 3.6% dividend yield.
The company’s current dividend yield outpaced its peers in the pharmaceuticals and biotechnology segment by almost 90% and its peers in the Health Care sector by more than 450%. In addition to the steadily rising dividend income, the company provided an 11.5% share price growth over the past 12 months.
The company’s next ex-dividend date is scheduled for November 9, 2017, with a pay date on December 1, 2017.
Pfizer Inc. (NYSE:PFE)
Founded in 1849 and headquartered in New York City, Pfizer Inc. discovers, develops, manufactures and sells health care products worldwide. The company operates through two segments – Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). The IH segment focuses on the development and commercialization of medicines, vaccines, and consumer health care products for application in internal medicine, vaccines, oncology, inflammation, immunology and rare diseases. Additionally, this segment provides products for consumer health care, such as dietary supplements and pain management, as well as gastrointestinal, respiratory and personal care. This segment’s products are marketed under several well-known brands, including Prevnar 13, Eliquis, Lyrica, Viagra, Advil and Centrum.
The EH segment offers products that will lose or have lost marketing patent protection, branded generic products, sterile injectable products, biosimilars and infusion systems. Lipitor, Norvasc, Lyrica, Celebrex and Pristiq are just a few of the brands included in this segment’s portfolio of product names. Additionally, this segment engages in the contract manufacturing business. Currently, PFE has licensing agreements with Cellectis SA (ALCLS:PA) and AstraZeneca plc (AZN:NYSE), as well as collaborative agreements with Eli Lilly & Company (LLY:NYSE) and Merck KGaA (MRK:NYSE). Currently, Pfizer Inc is working with HitGen Ltd. to build and screen DNA-encoded libraries to discover small molecule leads to be used in drug development, as well as collaborating with Merck and Corning (GLW:NYSE) on a pharma glass packaging project. Additionally, the PFE and InSphero AG are jointly developing a predictive toxicology test using human liver microtissues for predicting drug-induced liver injury.
The company’s current $0.32 quarterly dividend is equivalent to a $1.28 annual dividend payout and a 3.6% dividend yield. This current yield is 4.2 % higher than the company’s five-year average yield of 3.4%.
The company started paying a dividend in 1901. More importantly, the company cut its quarterly dividend only once over the past two decades. While PFE cut its quarterly distribution amount only in the second quarter of 2009, the 50% cut was significant enough to make the total annual dividend for 2010 lower than the 2009 amount as well.
However, the 2011 total dividend was already higher than the previous year and the company continued boosting its annual dividend for the next seven years. Since 2011, the total annual dividend distribution grew at an average rate of 8.6% and nearly doubled during that period. The annual dividend payout has fully recovered from the 2009 cut and the current $1.28 annual amount is equal to the 2008 total prior to the dividend cut.
The share price fell 6% during the month of October 2016 and closed at its lowest level in the past 52 weeks on October 31, 2016. Since its lowest closing price in October 2016, the share experienced moderate volatility, but with a clear upward trend.
The most recent significant price drop ended on August 18, 2017, when the share price closed at $32.67, which was just 0.8% above the $32.42 share price from October 4, 2016. However, the share price rose 10.6% over the last 45 days and closed at its new 52-week high of $36.14 on October 3, 2017.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.