Pfizer

Pfizer pays a dividend yielding about 6.7%, several times what the average healthcare stock pays, and the payout uses only about 56% of profits so there is real room to keep funding it. The stock trades around 8.7 times forward earnings, far below where big drugmakers usually trade, which means a lot of bad news is already priced in.

The medicines Pfizer recently launched or acquired pulled in 3.1 billion dollars last quarter and grew 22% from a year earlier. Cancer drug Padcev jumped 39%, migraine drug Nurtec rose 41%, and a key patent settlement on Vyndamax pushes off generic competition all the way to 2031, protecting roughly 6 billion dollars a year in sales.

Several of Pfizer's biggest sellers lose patent protection before 2030, putting an estimated 14 to 15 billion dollars of yearly revenue at risk from cheaper copycats. The company expects earnings to keep shrinking for the next few years before the new drugs grow large enough to turn the tide.

Pfizer carries about 64.7 billion dollars in debt against only 13 billion in cash, and management expects that heavy load to stick around through this rebuilding phase. It also froze its dividend and stopped buying back stock, signs that cash is being stretched across debt, deals, and research all at once.