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Pfizer is the world's largest drug maker, but shares have taken a beating this year due to the patent expiration of Lipitor, the company's top-selling cholesterol drug. Still, Pfizer has other drugs in the pipeline that will likely soften the blow, including Apixaban, an anti-coagulant that may be superior to existing treatments and addresses a $7 billion market.
Earnings growth for Pfizer is projected to slow to only 3% a year, but the trade-off is a 4% dividend yield. In December, Pfizer increased its dividend by 10% to an $0.88 annual rate. The new dividend rate is payable March 6, 2012, to shareholders of record on Feb. 3, 2012. The company has paid dividends for 73 years and posted 29 consecutive years of increases, before cutting the dividend in 2009 to pay for the Wyeth acquisition.
Risks to consider: A double-dip recession would hurt First PacTrust and GE. Pfizer may not be able to bring new drugs to market quickly enough to offset declining Lipitor sales.
Action to take: My top pick within this group of stocks is GE, because of its impressive earnings and dividend growth, not to mention its solid position in so many industrial segments, including health care, infrastructure, technology, aviation and finances. I like Pfizer for its cash flow and yield, and RGC and Sysco for their consistent dividend-paying track records.
>>To see these stocks in action, visit the
5 Stocks With Growing Dividends to Buy Before Year-End portfolio on Stockpickr.
Disclosure: Neither L. Springer nor StreetAuthority, LLC hold positions in any securities mentioned in this article. Also see: