The ongoing bull market has affected different businesses to varying degrees. While some stocks have been propelled upward by positive investor sentiment, others have experienced a more tepid response.
Ultimately, investors should evaluate the business behind the stock price to determine whether or not it merits an investment. Stock price only tells you so much, and sometimes, a great company can present itself at a discount or valuation that begs 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 down by single digits from one year ago and is down notably from its all-time highs a few years back. However, the stock has seen shares increase by around 11% over the trailing six-month period.
It seems some investors still aren’t quite sure what to make of the company that garnered unprecedented attention during the peak of the COVID-19 pandemic with its vaccine and oral antiviral drug. The company put the billions in revenue and profits it garnered from those sales and vaccine supply agreements to good use, acquiring companies right and left.
These acquisitions expanded Pfizer’s footprint in disease areas, including oncology, immunology, genetic ailments, and more. Its purchase of cancer drugmaker Seagen alone roughly doubled its pipeline and added four already approved cancer drugs to its portfolio, including Padcev, which analysts think could have peak sales potential of anywhere from around $5 billion to $8 billion annually.
The Seagen acquisition is set to 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 its Vyndaqel family of drugs, Eliquis, the Prevnar family of vaccines, and Ibrance.
In the first nine months of 2024, Pfizer brought in revenue of just under $46 billion and profits of $7.6 billion. Compared to the same nine-month stretch in 2023, that top line figure represented a 2% increase, but its bottom line was up by an eye-popping 39%. Third-quarter revenues jumped 31% year over year to $17.7 billion.
Pfizer also returned $7.1 billion in capital to shareholders through dividends in Q3 alone. The company’s less-than-thrilling share price performance has pushed its dividend yield up to a juicy 6%. With over $7 billion in cash on its balance sheet as of last record, Pfizer maintains a solid liquidity position even as profits steadily improve. With shares still heavily discounted from a few years ago, it could be a good time for forward-thinking investors to take a slice of the action.
Realty Income(NYSE: O) is a real estate investment trust (REIT) that focuses on single-tenant commercial properties. Its portfolio of properties is distributed across the U.S., Europe, and the United Kingdom. These properties consist of over 15,000 commercial locations across 90 different industries.
While the REIT’s focus on retail commercial properties might lead one to believe that it could be vulnerable to cyclical headwinds, the company has proven its resilience and continued to fulfill its obligations to investors. Its tenants are also among some of the biggest names in the retail sector, including Walmart, Dollar General, Walgreens, and FedEx.
REITs are required to pay out at least 90% of their earnings to shareholders in the form of dividends. In the case of Realty Income, which yields over 5% based on current share prices, this REIT pays out its dividend on a monthly basis rather than a quarterly one. Not only has the company declared 652 consecutive monthly dividends and counting since its inception in 1969, but it has also enacted 108 quarterly dividend increases in a row.
That translates to about 54 years of consecutive monthly dividend payouts and 27 years of increasing its dividend each quarter. The REIT has also delivered a compound annual total return of around 13.5% since its listing on the New York Stock Exchange three decades ago. On a forward annual dividend rate basis, shareholders can expect to benefit from a payout of $3.16 per share.
In the REIT’s financial results for the recent quarter, Realty Income reported occupancy rates of 98.8%, with adjusted funds from operations (AFFO) rising 6% from the year-ago period to $1.06 per share (or $921 million). It also reported revenue of $1.3 billion, a healthy 31% increase from one year ago. For investors looking for a solid source of recurring dividend income and steady portfolio growth over a multi-year timeframe, Realty Income looks like a no-brainer buy.
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Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx, Pfizer, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
