Recently, we have published a list of 13 best healthcare dividend stocks to invest in. In this article, we look at where Pfizer Inc. (NYSE: PFE) competes against other best healthcare dividend stocks to invest in.
The US healthcare sector has been at the forefront since the emergence of Covid-19 in 2020, causing significant changes to the industry. The rise of telehealth, virtual consultations, and technological advances have shaped the way healthcare services are delivered.
Over the past 20 years, the healthcare sector has expanded considerably in relation to the broader economy, as reflected in the increasing share of gross domestic product (GDP). According to a CNBC report in 2003, healthcare costs accounted for 15.7% of US GDP, and increased by about 1.7 percentage points over the next decade to reach 17.4% in 2013. Today, it is estimated at around 18.4% of GDP, and forecasts from the Centers for Medicare & Medicaid Services suggest that it can withstand 20% including Deftice for forced by. Advances in medical technology and increased costs. The elderly population significantly increased the need for medical care, especially as the baby boomers retired, but longer life expectancy led to longer medical use. Furthermore, the prevalence of chronic diseases such as diabetes, cardiovascular disease and obesity contributes to increased costs. The latest breakthroughs in diagnostics, treatments, and medicines (beneficial) often come with higher costs, and further encourage sector expansion.
The overall share of the healthcare industry's economy is growing, with healthcare companies experiencing faster revenue growth than the broader markets over the past five years. Over this period, healthcare sector revenues have risen nearly 61% compared to growth of just over 38% across the broader market, as reported by CNBC. However, despite this strong revenue performance, the healthcare sector is lagging behind the broader market index that has been driven by the rapid expansion of the technology sector.
The healthcare sector faced a turbulent year in 2024. In the first half, investors were drawn to industries such as technology and communication services, particularly those associated with the growing influence of AI, with medical stocks still behind. However, as market gatherings expanded later in the year, healthcare stocks saw some recovery, but certain segments continued to struggle with disparities in supply and demand from the pandemic. Beyond these challenges, fundamental issues and policy uncertainties have created additional obstacles for some of the sector. Some regulatory pressures could be eased in incoming administrations, but others are expected to remain persistent issues, including concerns about drug pricing.
The story continues
On a positive note, innovation remained strong throughout the year. Biotechnology companies have contributed to increasing market valuation for pharmaceutical companies by providing a series of encouraging clinical updates, whilst increasing enthusiasm for new treatments targeting obesity and diabetes. A faithful report suggests that the healthcare sector is well suited to growth in 2025. The industry is attractive across a variety of market conditions, covering a wide range of segments that strengthen business fundamentals such as rising cash flows and provide a fusion of defensive stability and growth potential.
The healthcare sector is gaining attention due to the increased dividend payments. Janus Henderson reports that in the third quarter of 2024, the total dividend distributed by the global healthcare industry reached $25.7 billion, up from $18.7 billion in the third quarter of 2018. With this in mind, we'll look at some of the best dividend stocks in the healthcare sector.
In this list, we scanned Insider Monkey's Q4 2024 database and selected healthcare dividend companies. From that list, we selected healthcare stocks with a strong track record of paying dividends to shareholders. This makes it resilient in your current environment. According to Insider Monkey's 2024 database, stocks are ranked in ascending order in which hedge fund investors own the stock.
Why are hedge funds interested in the stocks they accumulate? The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. The quarterly newsletter strategy has chosen 14 small and large caps per quarter, returning 373.4% since May 2014, surpassing the benchmark by 218 percentage points (see more here).
Is Pfizer Inc. (PFE) the best healthcare dividend stock to invest in?
A medical technician wearing a mask that mixes protective gloves and biopharmaceutical solutions.
Number of hedge fund holders: 92
Pfizer Inc. (NYSE: PFE) is a New York-based pharmaceutical and biotechnology company specializing in a wide range of related services and products. The company reported an increase in operational revenues of 12% from non-covid products over the past year, indicating its commitment to strategic execution. It achieved its net cost reduction target of $4 billion through its ongoing cost restructuring initiative, raising it to about $4.5 billion by the end of 2025. Additionally, under the manufacturing optimization program, Pfizer aims to achieve $1.5 billion in net cost savings by 2027, and is expected to be open in 2025. year.
Pfizer Inc. (NYSE: PFE) also focuses on strengthening the presence of oncology. This was highlighted by the major $43 billion acquisition of Seagen to strengthen its cancer treatment portfolio. The company expects significant growth in the segment over the next five years, with plans to double its patient base and introduce at least three blockbuster drugs by 2030, each of which is projected to generate more than $1 billion in annual revenue. Advances in oncology are already clear, with revenues from this segment increasing by 25% in 2024.
One of the best dividend stocks, Pfizer Inc. (NYSE: PFE) offers a quarterly dividend of $0.43 per share, up 2.4% in December 2024. The stock offers attractive dividend yields as of March 20th.
Overall, PFE ranks fifth in the list of the best healthcare dividend stocks to invest in. While acknowledging the potential of PFE as an investment, our belief lies in the belief that some deeply undervalued dividend stocks offer higher returns and hold a greater promise to do so within a shorter time frame. If you're looking for deep, undervalued dividend stocks that are more promising than PFE, but trade at 10 times the revenue and increase double-digit profits per year, check out our report on cheap dividend stocks in the soil.
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Disclosure: None. This article was originally published on Insider Monkey.
