Pfizer Inc. (NYSE: PFE) could cash in on the coronavirus with a new vaccine. Pfizer and BioNTech SE (NASDAQ: BNTX) are testing a COVID-19 vaccine.
The vaccine generates antibodies against the SARS-CoV-2 or COVID-19 virus, Stat News claims. Additionally, the antibodies prevent the COVID-19 virus from functioning in vaccinated peoples’ bodies.
Pfizer and BioNTech base their vaccine on the messenger RNA technology, Stat News reports. Messenger RNA uses a key genetic messenger that creates a protein. The protein “teaches” the human immune system to resist SARS-CoV-2.
Pfizer announces COVID-19 RNA Vaccine Candidate
Importantly, Pfizer and BioNTech released a paper that contains some clinical data about the vaccine. On the negative side, scientists have not peer-reviewed the paper.*
In detail, the paper describes a Phase ½ Study of the immunology of “a
COVID-19 RNA Vaccine Candidate (BNT162b1) in Adults 18 to 55 Years of Age.*” However, the paper is only an interim report on the first results of a preliminary study of the vaccine.
Thus, Pfizer does not have a COVID-19 vaccine. Instead, Pfizer has what could be the first building block for a SARS-CoV-2 vaccine.
Will Pfizer and BioNTech make money from a Coronavirus Vaccine?
I think a COVID-19 vaccine could help Pfizer and BioNTech make enormous amounts of money. To explain, governments will use tax money to buy hundreds of millions of doses of the vaccine for their citizens.
For example, the United States government could buy over 331 million doses of the vaccine for its 331.003 million citizens. Moreover, the Chinese government could order 1.5 billion doses of the vaccine for China’s 1.439 million citizens.
Plus, the Indian government could purchase 1.4 billion doses of BNT162b1 for India’s 1.38 billion citizens. Plus, the European Union (EU) could purchase 446 million vaccine doses for its 446 million inhabitants.
A coronavirus Vaccine could make Pfizer a perfect value investment
Governments will purchase the vaccine and force people to take it because of the havoc coronavirus is wreaking. In fact, Worldometers estimates there had been 10.85 million coronavirus cases and 519,980 COVID-19 deaths worldwide as of 2 July 2020.
I think governments will vaccinate everybody because of the cost of treating all the coronavirus victims. In addition, nations and economies are losing incredible amounts of money because of coronavirus.
The Congressional Budget Office (CDO) estimates US economy could shrink by over $10 trillion over the next decade because of coronavirus The New York Times estimates. Hence, resistance to a coronavirus vaccine could be economic and political suicide.
Thus, Pfizer could develop product governments will buy and force citizens to use. Hence, there could be unlimited market for Pfizer’s vaccine. I think a coronavirus vaccine could make Pfizer into a perfect value investment.
Pfizer could be a value investment
Pfizer (NYSE: PFE) could be a value investment because it is cheap and offers tremendous growth potential. For instance, Mr. Market paid $34.46 for Pfizer shares on 6 July 2020.
Moreover, Pfizer’s share price is stable. Pfizer started 2020 at $39.14 on 2 January 2020, fell to $28.49 on 23 March 2020, and rose to $34.60 on 2 July 2020. Thus, Pfizer is a cheap and stable stock.
Additionally, Pfizer paid a 38₵ quarterly dividend on June 2020. That dividend grew by 2₵ in 2020. In detail, Pfizer paid a 36₵ dividend on 7 March 2019 that rose to 38₵ on 30 July 2020.
Overall Pfizer offered a $1.52 annualized dividend of $1.52, a 4.65% forward dividend yield, and a 58.08% payout on 9 July 2020, Dividend.com estimates. Thus, Pfizer is a stable dividend stock with incredible amounts of growth potential.
Is Pfizer Making Money?
Currently, Pfizer makes enormous amounts of money. For example, Pfizer made a $9.640 billion gross profit on revenues of $12.028 billion in the quarter ending on 31 March 2020.
However, Stockrow estimates Pfizer’s revenue growth fell by -8.31% in the last quarter. Plus, Pfizer’s revenue growth fell by -9.22% in the quarter ending on 31 December 2019. Thus, Pfizer’s growth potential is falling.
On the other hand, Pfizer’s quarterly operating income grew from $1.536 billion on 31 December 2019 to $4.099 billion on 31 March 2020. Interestingly, Pfizer’s income grows while its moneymaking potential falls.
However, Pfizer’s management is taking steps to increase its moneymaking potential. In particular, Pfizer is working on a vaccine for the world’s most disruptive virus; COVID-19.
How Much Cash Does Pfizer Generate?
Finally, Pfizer generates significant amounts of cash. For example, Pfizer reported a quarterly ending cash flow of $2.196 billion on 31 March 2020. That cash flow grew from -$1.496 billion on 31 December 2019.
Additionally, Pfizer reported a $3.133 billion quarterly operating cash flow on 31 March 2020. That number was down from $3.769 billion on 31 December 2019, but up from $1.698 billion on 31 March 2019.
Impressively, Pfizer had $10.350 billion in cash and short-term investments on 31 March 2020. That number grew from $9.83 billion on 31 December 2019, but it fell from $11.619 billion on 31 March 2019.
Thus, Pfizer (NYSE: PFE) is a cash-rich company with high growth potential, and a cheap stock price that pays a decent dividend. Consequently, I think people who seek a stable stock that offers growth potential and income need to investigate Pfizer.
Pfizer makes money, pays a dividend, generates cash, and offers a stable share price. Additionally, Pfizer could market a product with incredible growth potential: a COVID-19 vaccine.
*https://www.medrxiv.org/content/10.1101/2020.06.30.20142570v1.full.pdf
Originally published at https://marketmadhouse.com on July 6, 2020.
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