Like deals? Do you need profits? No problem. Many Standard & Poor’s 500s stocks fit both the bill at this time, with a bunch of them boasting what makes them truly owned “in perpetuity.” Here’s a summary of three of the best bets right now.
There’s no denying that Pfizer (NYSE: PFE) not quite Pharmaceutical The power that used to be. The loss of patent protection on the blood-thinning drug Lipitor in 2011 was a blow that was never overcome, but it would also be naive to think that the company’s research and development (R&D) operations and acquisitions are as strong now as they were in the past. The pharmaceutical industry appears to have become more competitive in the meantime.
That’s why, after a burst of bullishness during and because of the COVID-19 pandemic (Pfizer’s baxlovid was an approved treatment), this stock is down 53% from its late 2021 peak.
The long-awaited winds of change have finally blown, albeit in a way that appears more destructive than helpful. Activist investor Starboard Value is shaking the chains, so to speak, Call Pfizer For its failures on the drug development and acquisition fronts. Specifically, Starboard notes that the $43 billion acquisition of oncology company Seagen in 2023 has yet to show a meaningful benefit given its high cost, and adds that Pfizer has failed to convert on the 15 drugs it was touting as potential blockbuster drugs. In 2019 to those major money-making drugs.
In defense of CEO Albert Bourla, the coronavirus infection has slowed R&D for most pharmaceutical companies, if only by complicating the logistics of drug trials. However, Starboard makes several fair points.
But what does this mean for current and potential shareholders? While it is usually best for an organization to acknowledge its weaknesses and implement much-needed changes, Starboard Value engagement should continue to drive this long-overdue overhaul.
By the way, nothing in this drama changes anything regarding Pfizer’s profits. Not only has it been paying quarterly like clockwork for years now, it’s also been raising its net annual payout for 15 years in a row. This line is not in real danger either.
Newcomers will plug into the stock while the forward-looking dividend yield is 5.8%.
There’s a good chance you’ve never heard of it Real estate income (NYSE:O). Don’t let its lack of notoriety fool you. This $55 billion component of the S&P 500 is here to stay and thrive.
Real estate income is the owner. It is organized as a real estate investment trust, or REIT. REITs are investments that trade like stocks, but pass through the bulk of any rental earnings generated by the REIT’s underlying real estate portfolio. It’s an easy way for investors to get involved in the rental property business without the usual hassle of buying, selling, finding tenants, and performing property maintenance.
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