Today we share an income-generating options trade on a healthy-dividend blue-chip pharmaceuticals company. The trade not only generates compelling premium income and gives you a shot at selling the shares at a solid gain in less than 1-month, but it also gives you a chance to capture the dividend payment if the shares don’t get called away from you before the ex-dividend date in a little over 1-week from today. Also very important, we like this healthy-dividend company as a long-term investment, and we wouldn’t mind holding on to the shares if they don’t get called away. This is an attractive trade to place today and potentially over the next few trading sessions.
Pfizer's 4.3% Dividend Yield: Worth a Closer Look
The 4.3% dividend yield of mega-cap pharmaceutical company Pfizer (PFE) is worth a closer look. Specifically, its return on capital is above its cost of capital (a good thing), its margins should increase as a result of the Upjohn spinoff, its covid vaccine is in addition to an already strong core business, it’s paid 328 consecutive quarterly dividend (and has increased the dividend 11 years straight), and the share price just dipped. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on investing.
Pfizer's 4.2% Dividend Yield: Undervalued Blue Chip, Or Dangerous Value Trap?
Pfizer (PFE) has a reputation for being a blue-chip pharmaceuticals company. However, its recent performance has been weak as the overall healthcare sector (and drug companies, in particular) have under-performed the market (President Trump has taken over the fight to reduce drug costs for investors). And Pfizer in particular has been undergoing some significantly risky portfolio restructuring. As a result, Pfizer’s dividend yield (4.2%) is now significantly higher than normal (as the price has fallen), especially for a Dow Jones stock. This article considers whether Pfizer is currently an attractive big-dividend blue chip, or a dangerous value trap.