The ongoing bull market has affected different companies to varying degrees. While some stocks have been boosted by positive investor sentiment, others have experienced a tepid response.
Ultimately, investors must evaluate the company behind the stock price to determine whether or not it deserves an investment. The stock price only tells you so much, and sometimes a great company can present itself at a discount or valuation that demands a second look.
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Here are two sensational growth stocks to consider for your portfolio right now.
Pfizer(NYSE:PFE) is still trading in single digits compared to a year ago and is down significantly from all-time highs a few years ago. However, the stock has seen shares rise about 11% over the past six months.
It seems some investors are still not quite sure what to make of the company that attracted unprecedented attention with its vaccine and oral antiviral drug during the peak of the COVID-19 pandemic. The company has put the billions in revenue and profits it amassed from these sales and vaccine supply deals to good use by acquiring companies.
These acquisitions expanded Pfizer’s footprint in disease areas including oncology, immunology, genetic disorders and more. The purchase of cancer drugmaker Seagen alone has roughly doubled its pipeline and added four already approved cancer drugs to its portfolio, including Padcev, which analysts believe could have peak sales potential of somewhere between $5 billion and $8 billion per year.
The Seagen acquisition will play a key role in management’s plan to have at least eight blockbuster oncology drugs in its portfolio by 2030. Looking at its broader portfolio, Pfizer’s existing blockbuster drugs include the Vyndaqel family of drugs, Eliquis, the Prevnar family of vaccines, and Ibrance.
Through the first nine months of 2024, Pfizer posted revenue of just under $46 billion and profit of $7.6 billion. Compared to the same nine-month period in 2023, that revenue figure represented a 2% increase, but operating income rose an eye-popping 39%. Third quarter revenue rose 31% year over year to $17.7 billion.
Pfizer returned $7.1 billion in capital to shareholders through dividends in the third quarter alone. The company’s unexciting share price performance has pushed the dividend yield to a juicy 6%. With more than $7 billion in cash on its balance sheet since the last record, Pfizer maintains a solid liquidity position even as profits steadily improve. With shares still deeply discounted from a few years ago, it could be a good time for forward-thinking investors to get in on some of the action.
Real estate income(NYSE:O) is a Real Estate Investment Trust (REIT) focused on single-tenant commercial real estate. The real estate portfolio is spread across the US, Europe and the United Kingdom. These properties consist of more than 15,000 commercial locations across 90 different industries.
While the REIT’s focus on commercial real estate could leave it vulnerable to cyclical headwinds, the company has proven its resilience and continued to meet its commitments to investors. Its tenants also include some of the biggest names in the retail sector Walmart, Dollar general, Wal vegetablesAnd FedEx.
REITs are required to distribute at least 90% of their income to shareholders in the form of dividends. In the case of Realty Income, which yields more than 5% based on current stock prices, this REIT pays its dividend on a monthly basis instead of quarterly. Not only has the company paid 652 consecutive monthly dividends since its founding in 1969, but it has also posted 108 quarterly dividend increases in a row.
That translates to approximately 54 years of consecutive monthly dividend payments and 27 years of dividend increases every quarter. The REIT has also delivered a compound annual total return of approximately 13.5% since its listing on the New York Stock Exchange three decades ago. Based on the annual dividend rate, shareholders can expect to benefit from a payout of $3.16 per share.
In the REIT’s financial results for the past quarter, Realty Income reported an occupancy rate of 98.8%, with adjusted operating funds (AFFO) increasing 6% from the same period last year to $1.06 per share (or $921 million). It also reported revenue of $1.3 billion, a healthy increase of 31% from a year ago. For investors looking for a solid source of recurring dividend income and steady portfolio growth over several years, Realty Income seems like a no-brainer purchase.
Consider the following before buying shares in Pfizer:
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Rachel Warren has no positions in any of the stocks mentioned. The Motley Fool holds positions in and recommends FedEx, Pfizer, Realty Income and Walmart. The Motley Fool has a disclosure policy.
2 Sensational Growth Stocks to Buy at a Discount was originally published by The Motley Fool
