Pfizer Hikes Dividend, Announces $10B Share Buyback Plan

The board of directors of Pfizer, Inc. (NYSE:PFE) announced a 6% hike in the pharma giant’s quarterly dividend for 2018 while also authorizing a new $10 billion share repurchase program.

The quarterly dividend was raised from 32 cents to 34 cents, which adds up to an annual dividend of $1.36 per share. This amounts to an annual dividend yield of 3.7%. The increased dividend for the first quarter of 2018 will be payable on Mar 1, 2018, to shareholders of record at the close of business on Feb 2, 2018.

Shares of Pfizer have risen 14.3% this year so far, comparing unfavorably with a 17.1% increase for the industry.

Pfizer regularly rewards shareholders through share buybacks and dividends. The company returned about $13.1 billion to shareholders in the form of dividends and share buybacks in 2015 and $12.3 billion in 2016, including the completion of a $5 billion accelerated share repurchase agreement. In 2017 so far, the company has bought back shares worth $5 billion. It has $6.4 billion remaining under the company’s current buyback plan.

Pfizer is exploring strategic alternatives for its Consumer Healthcare segment, the proceeds of which it plans to use to return value to shareholders in the form of share buybacks and dividends. For the Consumer Healthcare segment, Pfizer is considering either a partial or a full separation through a spin-off, sale or other transaction. A decision regarding the same is expected to be made next year. It may even choose to retain the business. The divestment of the Consumer Healthcare business will help Pfizer focus on its Innovative Health segment

Zacks Rank & Stocks to Consider

Pfizer carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the pharma/biotech sector include H. Lundbeck A/S (OTC:HLUYY) , ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) and XOMA Corporation (NASDAQ:XOMA) . While XOMA carries a Zacks Rank #1 (Strong Buy), H. Lundbeck and ANI Pharmaceuticals have a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

ANI Pharmaceuticals’ earnings estimates have moved up 2.4% for 2018 over the last 60 days. Share price of the company has risen 9.3% year to date.

While XOMA shares have skyrocketed 665.2% year to date, its 2018 loss estimates have narrowed almost 20% over the past 60 days.

Shares of Lundbeck have risen 21% so far this year while 2018 earnings estimates have gone up 3.2% in the past 60 days.

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