12 Undervalued Defensive Stocks for 2025

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1. Pfizer Inc. (NYSE:PFE)

Forward P/E: 8.98

Number of Hedge Fund Holders: 80

Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that develops, manufactures, markets, and sells biopharmaceutical products worldwide. The company works to advance prevention, wellness, treatments, and cures in emerging and developed markets. Pfizer Inc.’s (NYSE:PFE) goal is to become a world-class oncology leader. The company is already the third-largest biopharma company in oncology in the United States. Thus, it plans to continue its progress in oncology for the rest of the decade.

Using its pandemic profits, the company acquired Seagen in late 2023 for $43 billion to further bolster its oncology pipeline. The company is expected to continue looking for opportunities to acquire promising pharmaceutical companies to augment its pipeline further. This strategy is working well for Pfizer Inc., (NYSE:PFE) as management estimates earnings growth between 10% and 18% for 2025. Analysts also estimate the company’s earnings to grow by around 14% annually over the next 3-5 years.

Pfizer Inc. (NYSE:PFE) has an attractive dividend yield of 6.3%, higher than most blue-chip stocks. Its management has reiterated plans to support this dividend and raise it periodically, recently announcing a 2.4% increase in early December.

Overall, PFE ranks first among the 12 undervalued defensive stocks for 2025. While we acknowledge the potential of undervalued defensive stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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