It’s hard to believe but Pfizer (PFE, $19.91, down $0.06) is below $20 again. After months of treading water above $20, the stock will now try to hold down the high teens. Pfizer has been in a 5-year downtrend after hitting a high of nearly $50 in 2000. The company is one of the 30 Dow components but given its dismal performance is Pfizer really worthy of such a title?

Pfizer has long been admired by Wall Street but that love is dwindling after the company halted development on one of its top drug prospects, Torcetrapib, after a safety concern. Other issues that the company faces is the revenue replacement of Lipitor when generic competition comes within the next couple of years and poor sales of insulin inhaler Exubera, which analysts thought would be a $2 billion-a-year drug. Also, news that Chantix, a relatively new drug for Pfizer that is to suppose to help smokers, has been linked to suicidal thoughts hasn’t helped matters.

These concerns are warranted and Pfizer’s immediate plan to improve earnings are coming from cost cuts. The cost cutting initiatives will help (Pfizer plans to decrease total costs by $2 billion by the end of 2008) but Wall Street is growing impatient. The company’s pipeline isn’t too shabby but by no means is it enticing either.

There may be some decent options plays on the stock like selling calls if you really want to own Pfizer. And if you do own the stock, you can’t really complain about the sweet dividend yield of 6.4% you’re getting. Pfizer has had its share of problems but the stock trades at a forward P/E of 8. Throw in the dividend and suddenly Pfizer looks like a value play at these levels.

Rick Rouse