This week, Pfizer announced that it would not be raising its dividend for the first time in 42 years.
Look at the stock’s current yield and you’ll see why. Heck, the very fact that they’re going to maintain that payment is pretty good, don’t you think?
Sure, they could have tossed a penny onto the payment just to keep the record intact, but I’m not going to be too hard on them with everything going on in the markets.
So am I still positive on the company? Yes.
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{ 5 comments… read them below or add one }
Hello Nilus,
Looking at your latest DSS issue I was thinking Pfizer looked like a good one to follow your advice on.
Any thoughts on what the effect of the merger story today might have on that as far as value up/down?
thanks
rr
Nilus Mattive Reply:
January 15th, 2009 at 5:41 AM
Hi, Randy. Good question … and I will certainly cover it in the next issue of Dividend Superstars. But the short answer is that I think PFE remains a solid income stock.
Thanks Nilus,
I’m sure you know of the new investment initiative here in Canada as of 2009.
We are now able to invest $5,000 a year and pay no taxes on any profits from that.
My strategy is going to be to put the 5K for both myself and my wife into dividend producing investments, and I want to select the best paying ones to maximize cash flow.
I think that could protect us from possible economic hardship if we lost our jobs.
I look forward to your next issue!
rr
Nilus Mattive Reply:
January 22nd, 2009 at 9:53 AM
Yes, and that’s certainly a nice little gift for Canadian investors! A short list of quality dividend payers tucked away in such an account makes a lot of sense to me, especially if you’re going to reinvest payments.
Regarding PFE specifically, I didn’t have as much space as I thought to devote to the speculation on possible mergers in the issue that’s going to press tomorrow, especially since I the company’s layoff announcements overshadow the acquisition rumors in my mind.
But here’s the deal: I think PFE will pretty much have to make one or more major acquisitions to boost their near-term product lineup. Lipitor coming off patent is going to really sting. Who will they buy? Hard to say.
The important thing is that they have the money to do a deal, and right now, money talks. So I would expect the terms to be favorable for PFE if/when a deal happens.
Bottom line: I certainly don’t think Kindler is just sitting around waiting for his company’s major drug to get tossed to the hounds. (Seemingly, that is precisely what Wall Street does expect based on the current share price.)
Nilus Mattive Reply:
January 23rd, 2009 at 4:13 AM
Well, wouldn’t you know it … not a day after my last post the WSJ is now reporting that PFE and Wyeth are in serious talks about a merger! Stay tuned!