The Most Important Healthcare Stock You're Not Watching

A company with a $140 billion market cap is very large. It is also highly likely to be an important player in the industry where it competes. But that doesn't seem to matter today for Pfizer (NYSE: PFE). The healthcare giant's stock has lost more than 50% of its value since its 2021 high, seemingly forgotten by Wall Street as competitors grab headlines with their GLP-1 weight-loss drugs. Here's why Pfizer could be the most important healthcare stock you aren't watching.

Pfizer isn't even in the game yet

To be fair, Pfizer isn't performing particularly well as a business right now. The biggest knock against the drugmaker is likely that it doesn't have a GLP-1 weight-loss drug on the market. In fact, its own internal candidate had to be dropped because it didn't meet expectations.

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On top of the GLP-1 issue, Pfizer is facing a number of large patent expirations in the next couple of years. When the revenues from those drugs decline, the pharmaceutical maker will experience a top-line and bottom-line hit. Meanwhile, the company is investing heavily in its drug pipeline to develop new blockbusters. Research and development spending is always high in the drug sector, but Pfizer is working extra hard right now, given the patent expirations it is facing.

Don't count Pfizer out

While Wall Street is understandably concerned about Pfizer's results, it isn't a start-up with little to no business history. It is one of the world's most respected drugmakers, with a long and impressive history. It is highly unlikely that Pfizer has suddenly and permanently lost its way.

For example, when Pfizer had to drop its own GLP-1 drug, it didn't just give up on what is a new and important drug niche. It reworked its playbook, buying a start-up with an exciting GLP-1 drug candidate. It also inked a deal to distribute a GLP-1 pill for a Chinese company. Pfizer's ability to pivot so quickly is evidence of how well-run a company it really is.

Meanwhile, Pfizer has other products in development beyond GLP-1 drugs. Notably, it is working on oncology drugs, vaccines, and migraine drugs, among others, all of which are advancing through development and/or regulatory approval. It is unlikely that all of these drugs will be massive hits, and the timing of R&D successes is hard to predict, but history suggests that Pfizer will produce some big wins.

Pfizer is a fairly low-risk turnaround stock

When you step back and look at the big picture, investors are focused on drug companies like Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO), which are competing for the pole position in the GLP-1 weight-loss market. Pfizer is being left in their dust, but it isn't going to give up. In fact, it has doubled down after setbacks.

If you are a long-term investor, Pfizer could be a great turnaround option in the drug sector. And, it offers a lofty 6.7% dividend yield backed by a dividend that management is clearly looking to support through this difficult period. In other words, you are being paid very well to wait for Pfizer to prove, again, why it is an industry-leading pharma giant.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Pfizer. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.