Discover Two Undervalued Dividend Stocks for Long-term Investment

For investors seeking steady income, dividend stocks are appealing due to their potential for regular payouts and long-term capital growth when dividends are reinvested. Historically, dividend-paying stocks have outshone their non-dividend counterparts over extended periods. What could be more advantageous for investors than affordable dividend stocks? Pfizer and Viatris are two such businesses worthy of attention for their value and dividend prospects.

1. Pfizer

In the previous year, Pfizer witnessed a significant decline in revenue, amounting to $58.5 billion, which was a 42% dip from the year before, predominantly because of diminishing COVID-19 vaccine and medication sales. Despite this setback, the pharmaceutical giant is not slated to see a perpetual downturn.

The company has attained U.S. approvals for seven new products in the last year, overshadowing any rival achievements in 2023. These innovations are anticipated to turn the revenue trend upward for Pfizer. Excluding its COVID-19 treatments, Pfizer's core business observed a sound 7% year-over-year revenue increase in 2023. Pfizer's strategic involvement in COVID-19 solutions has helped it cross $100 billion in sales, providing capital for future investments.

One of the company's notable acquisitions is that of oncology expert Seagen for $43 billion, which promises to expedite cancer-related treatment developments. Pfizer aims to grow its blockbuster cancer drugs to eight by 2030 from the current count of five. It continues to explore various medical fields, including immunology, infectious diseases, and vaccine development for both influenza and COVID-19. Pfizer's robust pipeline of 112 candidates indicates a bright future for its product offerings.

Pfizer has raised its dividend by nearly 17% over the past five years and offers an appealing forward dividend yield of 6.18%. Furthermore, its forward price-to-earnings (P/E) ratio stands at a compelling 12, compared to the pharmaceutical industry's average of 18.4, making it an attractively priced dividend stock.

2. Viatris

Formed by the merger of Pfizer's former subsidiary Upjohn and Mylan N.V., Viatris is relatively new to the public market scene. It occupies an enviable niche in the market for generic and branded pharmaceuticals, housing several well-established product lines that promise customer loyalty.

Viatris has been proactive in restructuring its operations, divesting from lower-growth segments and channeling funds towards paying off debt and investing in more promising areas. A recent foray into eye care via acquisitions and an R&D partnership with Idorsia exemplifies its strategy to enhance its product pipeline and sales.

The company has maintained a net sales figure of $15.4 billion, and with its strategic business amendments, it is poised for potential growth. Viatris offers a forward dividend yield of 3.89%, and while dividend increases have been minimal since its inception, the company remains an attractive prospect for income-focused investors due to its low forward P/E ratio of 4.4.

Dividend, Investing, Value