Pfizer (NYSE: Moderna These two bioscience companies facilitate global vaccines (NASDAQ.NASDAQ:). Moderna and Pfizer are both my favorites.

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TipRanks Stock Comparison tool allows us to easily compare these two stocks.

Pfizer

Pfizer was already producing stellar financial results prior to COVID-19; in 2019, operating income grew by 13.29%, with the company’s wide range of approved drugs contributing to growth.

In 2020, Pfizer spent a lot of capital on Research & Development for the COVID-19 vaccine, which meant that operating income didn’t improve all that much in 2020 (+20.89%), even after the vaccine rollout started.

Pfizer’s income statement has seen a significant improvement in 2021. Operating income increased by 159.42% from the year before.

Research & Development costs are predicted to flatline for now, while the company’s topline revenue is anticipated to grow even further, as booster shots are likely to be consolidated.

Pfizer is at a great value point: its PEG ratio (0.26) is well below that of the benchmark stock (1.00) while its PE ratio (5.45% below its 5-year mean) is still very high.

Furthermore, Pfizer offers an attractive dividend, with a yield of 3.64% and 11 consecutive years of growth. There is still plenty of opportunity for dividend rises in the future, as Pfizer’s cash payout ratio has a discount of 32.42% to its 5-year average.

Wall Street considers Pfizer stock a Hold with an average Pfizer target price of $45.55, which implies upside of 7.30%. The stock has received 2 Buy ratings and 9 Hold ratings. There are no Sell ratings.

Moderna

Moderna was not well-known before the discovery of COVID-19. Moderna had been burning capital in the years preceding the vaccination rollout and suffered severe operating losses. The company’s 2019 operating losses were 940%.  

2020 saw a narrowing of operating losses to -36%. However, an operating profit was made in the past year at 54.39% as it launched its vaccines.

Moderna could still benefit from booster shots but Moderna’s financial statements are already overvalued due to its dependence on COVID.

Moderna can’t be profitable without converting its financial statements to U.S. accounting standard. It has a PE ratio 33.37 which is double that of Pfizer. The price to sales ratio for the company is also 129.51% lower than the industry average. However, this should not be overlooked considering the huge spike in sales of vaccines.

Moderna pays no dividends. This is in contrast to Pfizer. Investors will be looking for dividends during Q-4 in 2022 and Q-1 of 2022 as there is a possibility that the market may draw down. Moderna is unable to pay a dividend as it cannot sustain its net income through regular mass vaccination rollouts.

Wall Street believes Moderna to be a Hold. The average Moderna price target is $363.13. That implies a upside of 19.09%. The stock has received 3 Buy ratings and 7 Hold ratings. There are also 2 Sell ratings.

Last Word

Pfizer is still worth considering due to its solid past and dividend potential. Moderna was only a small beneficiary of the vaccine rollout. However, I expect the stock’s overvalued status to decline, even with regular booster shots.

Disclosure: Steve Gray Booyens had no position in the securities listed in this article at the time it was published.

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