Two Exceptional Growth Shares to Purchase at Reduced Prices
Two Exceptional Growth Shares to Purchase at Reduced Prices
The current bull market has impacted various businesses differently, leading to varied responses from the investment community. Some stocks have flourished thanks to optimistic investor sentiment, while others have faced a more subdued reaction.
Investors should always scrutinize the underlying business to determine the worthiness of investment based on the stock price, as it only tells a partial story. A remarkable company may present itself at a discount or undervalued price, inviting a fresh look.
Two noteworthy growth stocks currently deserve consideration for your portfolio are discussed below.
1. Pfizer
At present, Pfizer (PFE) is trading at a slight loss compared to last year and is also significantly below its historical highs. However, the stock's share price has risen by roughly 11% over the previous six months.
The company, which received unprecedented public attention due to its groundbreaking vaccine and oral antiviral drug during the height of the COVID-19 pandemic, still faces uncertainty in the minds of some investors. Pfizer used the billions in revenue and profits generated from these sales and vaccine supply agreements to improve its operations.
Through strategic acquisitions, Pfizer has expanded its presence in several critical disease areas, such as oncology, immunology, genetic disorders, and more. Among its notable acquisitions was the purchase of cancer drugmaker Seagen, which almost doubled its drug pipeline and added four approved cancer drugs, including Padcev, an up-and-coming treatment with an estimated peak annual sales potential of between $5-8 billion.
The Seagen acquisition is essential for Pfizer's ambition to have at least eight blockbuster oncology drugs in its portfolio by 2030. Its existing blockbuster drugs include its Vyndaqel family, Eliquis, the Prevnar family of vaccines, and Ibrance.
Despite recording revenue of nearly $46 billion and profits of $7.6 billion during the first nine months of 2024, which represented a 2% increase in revenue but a remarkable 39% increase in profit compared to the same period in 2023, Pfizer's shares have failed to reflect its strong performance. Its Q3 dividend payout to shareholders amounted to $7.1 billion. The company's relatively underperforming share price has pushed its dividend yield to an appealing 6%. With over $7 billion in cash reserves as of the last recorded data, Pfizer boasts a robust liquidity position while profits continue to improve, making it an enticing opportunity for forward-thinking investors.
2. Realty Income
Realty Income (O) is a real estate investment trust (REIT) focusing on single-tenant commercial properties with extensive holdings in the U.S., Europe, and the UK. The REIT's portfolio spans over 15,000 commercial locations across 90 industries.
Despite its focus on retail properties, Realty Income has demonstrated resilience, continuing to meet its investors' expectations even during challenging economic times. Its tenant base is comprised of major retail players like Walmart, Dollar General, Walgreens, and FedEx.
As a REIT, Realty Income is required to pay out at least 90% of its earnings to shareholders in the form of dividends, which it pays monthly, unlike other REITs that provide quarterly payouts. The company has been consistently paying monthly dividends since its inception in 1969, with 652 consecutive payments and 108 consecutive quarterly dividend increases since its inception.
The REIT's performance has delivered a compound annual total return of approximately 13.5% since its listing on the NYSE three decades ago, and shareholders can anticipate an annual payout of $3.16 per share.
In its recent financial report, Realty Income reported occupancy rates of 98.8%, with adjusted funds from operations (AFFO) rising 6% year on year to $1.06 per share (or $921 million). Its revenue for the quarter also increased 31% year on year to $1.3 billion. For investors seeking recurring dividend income and steady growth over an extended time frame, Realty Income appears to be an unmissable investment opportunity.
After analyzing the financial performance of Pfizer and Realty Income, it's important to consider the role of finance and investing in maximizing returns. Pfizer's (PFE) share price may be undervalued, given its strong revenue growth and significant acquisitions, making it an attractive investment opportunity for those seeking dividend yields and potential capital appreciation. On the other hand, Realty Income (O), a REIT focusing on commercial properties, has consistently delivered dividends and total returns, making it an appealing choice for investors seeking stable income and growth over the long term. Managing money wisely in these situations can lead to impressive returns in the world of finance and investing.