Jan 28 2009

Pfizer Post-Mortem – Another One Bites the Dust


stocks-blowing-up

True to my dividend investing code, I have sold Pfizer after their recently announced 50% dividend cut to offset the purchase of Wyeth. Pfizer has been a stock that I have held for a long time, and held great faith in the company as a strong dividend growth company. However this changed quickly and the stock is no longer a component of my dividend portfolio.[ad#tdg-embedded]

As I do with every stock holding that I own does not work out the way I planned I thought back to why I was holding onto Pfizer. It was due to that dividend and the strong dividend growth over the years. However, now that I think about it more and more this dividend growth and high dividend yield clouded my judgement and did not allow me to look at the real facts. This was a company that was in a decline and it was threatening that it would only get worse with some key drugs coming off of patent. It seems that the only way out of this for Pfizer was the acquisition of Wyeth and the impact was the company could no longer afford their high dividend.

Should I have sold sooner – probably. My dividend code did not allow me to do so and in this case it hurt me. That is the risk with a buy and hold philosophy and a dividend growth strategy. This period of time (i.e. a real deep bear market) has been difficult for dividend investors as it puts into question our whole strategy. However, I am a long term investor and I thought that over time Pfizer would turn around and the market would recognise the strong dividend growth. Now that there is no more dividend growth, all that time has been lost on what turned out to be a crappy investment!

(Photo Credit)



You are interested in dividend investing? Check out my Free Dividend Investing eBook and don't forget to sign-up to my RSS Feeds!

Similar posts:
TAGS:

10 Comments on this post

Trackbacks

  1. Intelligent Speculator » Blog Archive » Investment Talking wrote:

    [...] Dividend Guy is talking about Pfizer. [...]

    February 7th, 2009 at 6:30 am
  2. Blog Roundup: Murphy’s Law Edition » My Money Blog wrote:

    [...] Dividend Guy deals with Pfizer’s dividend cut. Even investing based on dividends has been rough recently, with Wells Fargo and GE cutting their [...]

    March 16th, 2009 at 6:59 pm
  3. Blog Roundup: Murphy’s Law Edition | myBlog wrote:

    [...] Dividend Guy deals with Pfizer’s dividend cut. Even investing based on dividends has been rough recently, with Wells Fargo and GE cutting their [...]

    March 24th, 2009 at 3:29 pm
  4. Blog Roundup: Murphy’s Law Edition | myBlog wrote:

    [...] Dividend Guy deals with Pfizer’s dividend cut. Even investing based on dividends has been rough recently, with Wells Fargo and GE cutting their [...]

    March 24th, 2009 at 3:29 pm
  1. Dividends4Life said:

    I pulled the trigger and sold also. Like, you PFE no longer was helping me meet my goals of long-term dividend growth.

    BTW, great picture for this article!

    D4L

    January 28th, 2009 at 9:02 am
  2. Brian said:

    Its a good thing you had less than 5% in PFE. That’s the trouble with individual stock picking, if you’re not diversified adequately you’ll get burned.

    I don’t think there would have been an easy way to dodge this dividend cut, unless you watched this stock meticulously.

    January 28th, 2009 at 9:03 am
  3. Dividend Growth Investor said:

    I could never really pull the trigger on PFE when it was trading in the low 20s.. The high payout, the constant merging and acquiring didn’t provide a stable ground for sustainable long term dividend growth.

    March 18th, 2009 at 4:34 am
  4. RealEstateBroker said:

    The dividend cut caught me totally off guard! I also sold this boring stock immediately.

    July 11th, 2009 at 2:02 pm
  5. tom dicks said:

    when i bought pfe it was without research and i doubted the buy and almost sold it turned out that i started to like it and my position has increased nicly with re-invested div. price has grown nicely latley i think i will hold to see what happens after wyeth merger

    September 25th, 2009 at 6:56 pm
  6. Richard Howard said:

    You have lots of great information, but I can’t stand those double underlined ads.

    December 16th, 2009 at 7:08 am

LEAVE A COMMENT

Subscribe Form

Subscribe to Blog

Get Our FREE eBook

My Broker

Questrade
Democratic Pricing - 1 cent per share, $4.95 min / $9.95 max

The Dividend Guy Supporters



Money Expert Credit Cards

Liability insurance from Markel direct







The Div-Net

Investment Links

What is an IVA?

Online Dividend Calendar

Friends of The Dividend Guy

life insurance over 50

CIMA

short term loans

Life Insurance

No Balance Transfer Fee

Doorstep Loans

Your Life Insurance

Trade Forex with no hidden terms; no requotes, no rejection policy. A forex broker as he should be; transparent and thorough.

Fed up of the finance? Take a break play bingo online

Highest Yield Dividend Stocks

Stocks to buy now

Online Home Insurance Quote for Buildings & Contents protection

Best Debt Settlement

UK Landlord Insurance Policy for Residential & Commercial Buildings

Cash loans for all your Financial Needs from Pounds to Pocket

uk loans

Negotiation Training

RG146

Comparing loans

Short Terms Loans for Bad Credit

Hitachi: Invoice Discounting

Personal Bad Credit Loans for every need and budget.

More Friends

  • Banking

    Banking your way just got easier.

  • Checking

    The convenience of checking - the interest rate of savings

  • Savings & CDs

    Choose the right option for the way you save.


Networks

Seeking Alpha Certified

Disclaimer

Any information shared on The Dividend Guy does not constitute financial advice. The Dividend Guy is not a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities readers or customers should buy or sell for themselves. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. For more information, click here. All posts are © 2005-2009, The Dividend Guy.