How to Buy Pfizer Stock (PFE)
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Pfizer isn’t new to the limelight. The company’s stock is included in dozens of health care, pharmaceutical and dividend index funds and ETFs, and Pfizer regularly makes headlines for its innovations in health care. But the company gained renewed interest during the pandemic, thanks to its COVID-19 vaccine (developed alongside German biotech company BioNTech).
The question for potential investors isn’t how Pfizer has performed recently — it’s what might come next and whether the stock is a good fit for your portfolio. Below, how to buy Pfizer stock and what to consider when doing so.
1. Analyze Pfizer’s future potential
It may be tempting to buy Pfizer stock based on headlines, but the reality is Pfizer’s potential success may be already baked into the stock price you’re paying today. In other words, as a retail investor, you’re not on the “ground floor” so to speak — you’re up against institutional investors who have the resources of an army to uncover the kind of things that move stock prices long before you do. That’s why it’s best to avoid investing in any company solely based on past performance or its current price.
Pfizer's stock price today
Instead, you’ll want to do as the pros do: pore over Pfizer’s financial statements, revenue, earnings, projected performance and dozens of other variables to determine whether Pfizer is a sound investment. All of this data should be available through your online broker, or via an independent research site like Morningstar.
» Want to learn more? How to evaluate individual stocks
2. Consider how Pfizer stock fits into your portfolio
Before purchasing any stock, consider how it fits in with your existing portfolio. Does the potential investment:
Add too much weight to any particular sector or industry?
Create an imbalance between value and growth stocks?
Tilt your portfolio too far toward stocks from a particular geographic region?
Put too much weight in equities?
All of these questions will help you determine if the stock will build diversification within your portfolio, or lead to over-concentration in one particular area.
For example, Pfizer is considered a large-cap value company, suggesting it may not see the rapid growth of, say, a relatively new tech company. However, Pfizer offers a strong dividend that has steadily increased, and in 2020, its stock price was less volatile than most of its competitors. (Remember, though, that past performance doesn't guarantee future results.)
Considering these factors, Pfizer may fit in better with a portfolio that needs a greater balance toward less-volatile, income-producing value stocks. This of course is just an example; there are dozens of factors that would go into balancing your particular portfolio and determining whether Pfizer may be an appropriate investment for you.
» Dive deeper: How to build a good investment portfolio
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3. Decide how much to invest in Pfizer stock
To figure out how much you should invest in Pfizer, first take a broader look at your financial situation. Consider:
Do you have adequate emergency cash savings?
Are you comfortable with losing access to the money you invest in Pfizer for at least five years? That’s generally the minimum time horizon financial advisors recommend for any stock market investment.
Have you taken care of other financial priorities, such as paying off high-interest debt?
Can you afford to lose money on your investment?
If you’ve answered yes to the above questions and feel ready to invest, but you still aren’t sure how much to contribute, consider dollar-cost averaging. With this strategy, you’ll invest a specific amount at regular periods, such as weekly or monthly. This can be less stressful than investing the full amount all at once, as it can lower the chance of buying in fully at an inopportune time.
4. Open a brokerage account and place your stock order
If you don't already have a brokerage account, you'll need one to buy Pfizer or any other stock. You should look for an online broker that charges no commissions on stock trades, and offers a wide investment selection, low or no fees and good customer service.
Opening a brokerage account is quick and painless — generally speaking, it takes less than 15 minutes and the process is very similar to opening a bank account. Once you have your account open and funded, you can place your stock order via the broker's website. The process to buy Pfizer stock is the same as buying the stock in any other company: Check out our guide on how to buy stocks for step-by-step instructions.