Pfizer Stock Is Doing Something It Hasn't Done Since 2022

Pfizer (NYSE: PFE) stock hasn't made for a good investment over the past five years. It has declined by 25% in value over that stretch, while the S&P 500 has climbed by 68%. Investors have lost confidence in the company's ability to grow, as it loses patent protection on key drugs and faces an uncertain future.

Besides a dividend, there hasn't been a compelling reason for investors to buy shares of Pfizer. But this year, with there being more concern in the markets and investors piling into dividend stocks, Pfizer has suddenly become a more enticing option. As a result, the stock is doing something it hasn't done in multiple years -- it's outperforming the S&P 500.

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The last time Pfizer's stock outperformed the S&P 500 was in 2022

As growth stocks have been in high demand over the past couple of years, investors have largely looked past Pfizer due to the question marks surrounding the company's future.

In 2025, shares of the healthcare giant fell by 6%. The year before that, they were down by 8%, after crashing 44% in 2023. Even in 2022, the stock declined by 13%, but that was a year when the S&P 500 fell by 19% as high inflation weighed on the markets as a whole. And that was the last time that Pfizer proved to be a market-beating stock.

This year is playing out the same way, and for comparable reasons. Investors are worried about the state of the economy, commodity prices are rising, and there are multiple wars taking place. There are an abundance of reasons for investors to look for safety these days, and Pfizer, with its 6.4%-yielding dividend, makes for an attractive option of late.

Is Pfizer a good stock to buy right now?

Pfizer's gains are still relatively modest this year. It's only up 8%, and while that's technically far better than the S&P 500's decline of 4%, the healthcare stock is nowhere near making up for its losses in recent years. In fact, it still looks incredibly cheap, with its forward price-to-earnings multiple being extremely low at just over nine.

This is a severely discounted stock. And while there are question marks about Pfizer's future growth, the business remains, at the very least, a stable one to invest in. This past year, the company's revenue came in at $62.6 billion, which is a 2% operational decline from the previous year. That's not great, but it's also not terribly awful, either. For a heavily discounted stock, it's also what you might expect. But in the long run, it may have room to grow from all the acquisitions it has made in recent years.

Pfizer faces some uncertainty ahead, but with such a low valuation, it offers investors a margin of safety that's hard to find these days. Plus, it pays a high dividend. Overall, this may be one of the better stocks to buy right now, as Pfizer may be due for a prolonged rally this year.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.