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Dear Mr. Berko:

Dear R.T.:

You and lots of others have a form of post-traumatic stress disorder, which on Wall Street is known as TSMP, or temporary stock market paralysis. It’s a widespread symptom of these times.

Pfizer Inc. (PFE-$20.56), down from the mid-$40s in 2002, has a severe case of low blood pressure even though the board raised the dividend to $1.28, providing new investors with a lovely 6.2 percent yield. PFE is among the extremely rare companies that have increased their dividend each year since 1975.

This year PFE bought Coley Pharmaceutical Group Inc., a bio-therapeutic research company with specific interests in immuno-therapy. PFE also bought CovX Research, another bio-therapeutic company that focuses on preclinical oncology and metabolic research. PFE purchased Serenex Inc., which has potential treatments for solid cancer tumors and hematological malignancies, and Encysive Pharmaceuticals Inc., which makes molecule compounds for cardiovascular, vascular and related inflammatory diseases.

These four acquisitions plus planned future acquisitions are indicative of management’s emphasis to build a biotech business and expand its pipeline. This year PFE expects revenues to come in at about $49 billion, slightly more then they were in 2007. But expected 2008 earnings of $2.35 per share will be about 15 percent higher than 2007 earnings of $2.06 a share. So it’s reasonable to expect the board to increase the dividend again this year to perhaps $1.36 from $1.28.

Net profit margins continue to improve, and at 30.5 percent they are the highest in the company’s history.

I’m particularly impressed that PFE’s revenues grew by 4.1 percent last year considering the intense competition for its blockbuster antidepressant Zoloft and its popular cardiovascular drug Norvasc. I’m also encouraged that sales of PFE’s cholesterol-fighter Lipitor grew by 2 percent, which signals the beginning of the drug’s stabilization against the onslaught of Zocor.

I’m also impressed that new drugs such as Sutent (oncology), Chantix (smoking cessation treatment) and Lyrica, (the only drug approved by the Food and Drug Administration-for the treatment of fibromyalgia pain) are filling the void left by PFE’s various patent expirations.

And I’m impressed with the new CEO, Jeff Kindler. He has reduced PFE’s head count by 11,000, shuttered six manufacturing sites, lowered long-term debt, reduced capital costs and closed three research and development facilities.

Revenues rank PFE as the largest pharmaceutical company in the world, which provides impressive economies of scale. Pfizer also has big bucks ($22 billion in cash) to crank the research power that supports continued development of new drugs, the growth lifeline for every pharmaceutical company. Certainly this why Pfizer has 158 drugs in its fecund pipeline, which has generated 15 new drug approvals since 2004. Several of these new drugs could easily be billion-dollar blockbusters in the coming years.

Value Line believes PFE could be a $40 stock in the next two to three years; so do Morningstar, UBS, Fidelity, Vanguard and Capital Research. So I suggest that you jump on the bus while there are good seats left.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.© Copley News Service