Shares in pharmaceutical giant, Pfizer (NYQ:PFE) are trading at $49.45, just 19.8% from their 52-week high. The company is on a strong forward march, with its share price up 29.2% compared to its sector in the last year and 15.7% in the last six months. As momentum is a strong signal of continued outperformance, Pfizer's shares are worth a closer look.

The pharma industry has had a turbulent few years. Revenue uplifts have been available to those companies (like Pfizer) which were able to develop Covid-19 drugs and vaccines, while profit pressures have come as the wider health space has seen dwindling demand. Meanwhile, the sector has been at the heart of a media storm which has sometimes sent share prices soaring and other times caused big dents in sentiment.

But as the pandemic continues to drift from the spotlight amid new global turbulence, the pharma sector remains has defensive as ever and company valuations continue their strong upward march. When this momentum is combined with a strong underlying investment case, the outlook could be exciting.

Does the Pfizer fundamental investment case stack up?

On a trailing twelve month basis, Pfizer recorded net sales of $92,367m, which compares to $46,084m in the prior trailing twelve months. The compound annual growth rate of Pfizer's sales was 9.00% in the last five years. Operating profits were $28,010m last year, equating to an operating profit margin of 30.3%. The company has generated an average operating profit margin of 22.5% over the last five years.

At the bottom line, Pfizer's net profits were $24,967m last year, equivalent to a net profit margin of 27.0%, which compares to a five year average net profit margin of 31.3%. In that time the company has recorded a compound annual growth in group earnings per share (EPS) of 14.2%. The EPS growth streak is 3 years.

While these numbers paint a good picture of Pfizer's performance - which ultimately impacts its ability to generate returns for its shareholders - income performance is not the end of the story. In assessing Pfizer's effective use of internal assets and external investment in generating profits as well as its ability to convert those profits into cash, we can gain a better understanding of the company's health and long-term outlook.

Pfizer generated a return on assets (ROA) of 14.9% last year, which provides an indication of the efficiency with which the…

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