Pfizer, A Cheap Stock with a 3% Yield
We’re always big fans of confirmation bias. Today’s confirmation bias comes from Barron’s. They ran a screen for companies with dividend yields greater than the S&P 500’s current yield and with increasing earnings estimates. Barron’s came up with 4 and one of them, Pfizer, is a current holding.
Pfizer ( PFE ) has topped earnings estimated for 10 consecutive quarters. It’s slated to report fourth quarter results on Feb. 2. Barron’s recommended Pfizer last October, citing a modest valuation and potential for double-digit annual earnings growth through the end of the decade. The stock price since then has come down by 9%, in line with the market, but earnings estimates have been creeping higher while those for the market have been falling. Shares trade at 13 times the 2016 earnings forecast and yield 3.9%.