Cathie Wood and high dividend yields don't go together. Wood and her Ark Invest funds focus on innovative growth firms, not high-dividend stocks. However, Pfizer (NYSE: PFE) was an exception. Wood invested in the large drugmaker for her Ark Genomic Innovation ETF in 2021. In recent months, she sold this high-yield dividend stock. Should you sell Pfizer?
No more Pfizer Wood's Ark Genomic Innovation ETF owned almost 500,000 Pfizer shares in 2023. The ownership was dramatically decreased 16 days later when Wood sold almost 337,000 shares. More sales were coming.
Pfizer shares were sold by the Ark Genomic Innovation ETF in the first five days of March. Selling continued the following week. Today, Ark Genomic Innovation ETF's 40+ holdings don't include Pfizer. Wood may be leaving Pfizer after two years of ownership.
Wood no longer likes Pfizer. Why? These moves beg the question: Why does Wood dislike Pfizer? The company's stock chart since she bought shares in the third quarter of 2021 provides one answer.
Pfizer's COVID-19 vaccine Comirnaty and oral antiviral Paxlovid sales have plummeted. The world's post-pandemic demand for these products has plummeted. The shift from federal to private vaccination funding in the U.S. also affected sales. Second, Pfizer risks a big patent cliff in coming years. Between 2025 and 2027, Eliquis, Ibrance, Inlyta, Xeljanz, Xtandi, and Vyndaqel will lose crucial patents.
Wood likely knew about Pfizer's patent expirations when she bought the shares. She may not have expected COVID-19 sales to plummet. Perhaps Wood bet that Pfizer would dominate the obesity market. The business abandoned lotiglipron, a once-a-day weight-loss drug, in June 2023. Pfizer stopped developing its twice-daily obesity drug danuglipron in December.
Also sell Pfizer? Like Wood, should others sell Pfizer stock? Every investor has distinct goals. Pfizer may no longer suit some portfolios. I believe most investors should keep onto Pfizer and acquire more shares than sell. Pfizer's dividend yield leads 6.1%. The company doesn't need significant share price growth to give investors good total returns with that rich dividend. The dividend seems sustainable at current levels.
I predict Pfizer's share price to climb significantly in the next years. Already discounted. The company's new products and indications should produce enough revenue to cover the patent cliff. Pfizer's business development acquisitions, including the Seagen acquisition, should add $25 billion in sales by 2030.
Ark Invest may benefit from Wood's Pfizer departure. However, buying the high-yield dividend stock at its current valuation will certainly benefit most investors over time.
Stay turned for development