Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Who Really, Really Wants Some More Pfizer Inc. (PFE) Stock?

Page 1 of 2

An entity with deep pockets is looking to buy boatloads of Pfizer Inc. (NYSE:PFE) stock. And we’re talking yacht-sized boatloads — not canoe-sized ones. Who is this big spender eager to buy shares of the pharmaceutical giant?

None other than Pfizer itself.

Familiar pattern
Pfizer Inc. (NYSE:PFE)

Pfizer Inc. (NYSE:PFE)’s board authorized a new $10 billion share-repurchase program this week. That comes on top of $3.9 billion remaining under the company’s current share-buyback authorization.

The latest move is part of a familiar pattern for Pfizer Inc. (NYSE:PFE). Over the past two and a half years, the company has embarked upon four different repurchase programs. Including the latest authorization, the combined amount of these buybacks totals around $39 billion. That’s a boatload of money in anyone’s book.

This new buyback of $10 billion plus the remaining $3.9 billion from the last authorization comes to nearly 7% of the company’s current market cap. Pfizer also plans to retire around $11.4 billion in shares with its spinoff of animal-health business Zoetis.

Other alternatives
Of course, some investors might have preferred that Pfizer Inc. (NYSE:PFE) bump up its dividend instead. Pfizer’s yield stands at 3.4% currently. That’s not bad at all, but it’s lower than the five-year average yield of 4.4% that shareholders have enjoyed.

On the other hand, Pfizer’s yield already stacks up pretty well against some other big pharmas. Bristol Myers Squibb Co. (NYSE:BMY) has a dividend yield of 3.1%. Merck & Co., Inc. (NYSE:MRK)‘s yield stands at 3.7%. Pfizer fits right in the middle but still pretty close to both of these peers.

Other investors might wish that Pfizer Inc. (NYSE:PFE) would use some of its cash to acquire a few smaller companies. Protalix BioTherapeutics Inc. (NYSEMKT:PLX) has been mentioned as one possible candidate. The two companies already partner together on Gaucher disease drug Elelyso. In February, Protalix BioTherapeutics Inc. (NYSEMKT:PLX) spurred rumors that Pfizer could be interested in buying the company after it announced that it had engaged Citigroup Inc (NYSE:C) to pursue a “broad array of strategic alternatives.”

The Elelyso connection does appear to make Protalix BioTherapeutics Inc. (NYSEMKT:PLX) a reasonable fit for Pfizer. Israeli newspaper Calcalist reported in February that Protalix wanted to sell for $1 billion. That’s more than twice the current market cap of the company and could be more than what larger players are willing to pay. However, that price tag is only a drop in the bucket for Pfizer.

Motley Fool analyst Max Macaluso suggested nearly a year ago that Pfizer should seriously consider partnering with MannKind Corporation (NASDAQ:MNKD). Max saw some synergies in the two companies’ working together on commercializing MannKind Corporation (NASDAQ:MNKD)’s inhalable insulin product, Afrezza. MannKind has stated that it is in discussions with potential partners.

Partnering is a different proposition than buying a smaller company. However, many of the same reasons given for a partnership could also apply to an outright acquisition. Even with MannKind Corporation (NASDAQ:MNKD)’s big stock run-up this year, Pfizer Inc. (NYSE:PFE) could easily foot the bill if it chose to buy the up-and-coming biotech.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!