Investing in a top healthcare company whose share price has been tanking in recent years could present a huge opportunity for investors, especially when that company has been bolstering its growth prospects via acquisitions and expansion of its pipeline. And if that stock trades at a cheap valuation and pays a high dividend, it would seem like a no-brainer buy today.

If that were the case, however, shares of Pfizer (PFE -0.23%) would be taking off. Instead, investors are growing more apprehensive of the stock, not less; this already cheap stock is down a few percentage points this year.

Are the concerns about the business valid, and could Pfizer be in trouble, or could this be a great opportunity to buy a potentially mispriced and undervalued healthcare stock?

Pfizer's financials haven't been bad

Pfizer isn't generating the massive growth it was in previous years, as COVID-related revenue has been diminishing. But the business itself is still generating good organic growth, and there's reason to be optimistic about its core operations moving forward.

Last week, the company reported its year-end numbers for 2024, which weren't all that bad. While sales of its COVID vaccine, Comirnaty, declined by 52% to $5.4 billion for the full year, the company's top line still rose by 7%. Pfizer's specialty care segment generated 11% growth, and its oncology business, which got a boost from its acquisition of Seagen, expanded at a rate of 25%. Even its primary care business, which includes Comirnaty, only declined by 2% year over year, despite the significant decline in COVID-related revenue.

Investors looking ahead are concerned that in the future, as the company loses patent protection on key drugs, including Eliquis and Vyndaqel, that its financials will deteriorate further. That said, this is a risk that is common for successful pharma companies -- patents don't last forever. By focusing on acquisitions and investing into its pipeline, Pfizer has been making moves in recent years to put itself in a much better position in the long run and offset declines in revenue.

Pfizer is trading at a considerable discount

Unfortunately, investors aren't convinced, as is evident through Pfizer's beaten-down share price. In just three years, Pfizer's stock has lost half of its value. Today, many investors see it primarily as a vaccine or COVID stock. Concerns are rising that Robert F. Kennedy Jr., who many people see as being against vaccines and taking a tough stance on healthcare, could become the secretary of Health and Human Services (HHS), which has given investors even more of a reason to be bearish on the stock.

But government positions change over time and with each administration. And predicting what policies a government may enact is difficult, if not impossible. Changes can take time, and if you're investing over a period of five-plus years, then who's in charge of HHS during an administration may not prove to be a long-term issue. While it may weigh on the stock in the short term due to investor sentiment, an unfavorable government appointment is not necessarily going to cripple a top healthcare business such as Pfizer.

All this negativity, however, does open up an opportunity for investors to buy the stock at a discount. Despite being a top company in the healthcare industry, investors are treating Pfizer as a highly risky business to invest in, and that could be a huge mistake.

Currently, Pfizer's stock is trading at just 18 times trailing earnings. And based on analyst projections, it's at a forward price-to-earnings multiple of less than 9. There's a significant discount here, as the average stock in the Health Care Select Sector SPDR Fund trades at more than 18 times its future profits.

Is Pfizer stock a good contrarian buy right now?

Pfizer's stock performance doesn't appear to be aligning with how the business is doing, which can be a sign that the markets are mispricing it. For investors, this can be an opportune time to consider adding shares of Pfizer to your portfolio.

The important thing to consider is the long-term trajectory of the business, not policy changes in government that may prove to be temporary. Investors appear to be bracing for the worst when it comes to Pfizer and overlooking the long-term potential that it has, especially with its acquisition of Seagen to grow its oncology business in the years ahead.

It may be a bumpy ride for Pfizer short term, but this can make for an excellent investment to hang on to for the long haul. And its high-yielding dividend, which pays 6.6%, can give investors plenty of incentive to be patient.