By Ransdell Pierson and Bill Berkrot

NEW YORK (Reuters) - Pfizer Inc <PFE.N>, which was considering splitting itself for more than two years, said on Monday it would not do so, prompting shareholders to expect more deals that could bolster its roster of new medicines.

The largest U.S. drugmaker said its lengthy analysis determined that splitting off its low-growth generics from its patent-protected branded products would not boost cash flow or better position the businesses competitively. The move would also disrupt operations, have inherent costs and fail to deliver any tax efficiencies, the company said.

"I never saw the logic behind a split-up," said portfolio manager Les Funtleyder of E Squared Asset Management, which owns Pfizer shares. Buying and developing new drugs in oncology and other therapeutic areas is the key to growth for the company, he said.

"We'd rather see them do some bolt-ons in the $1-to-$10-billion range, which are easily doable for Pfizer," he said.

Pfizer will keep the generics and branded medicines as separate divisions, saying it retains the option to split later if "factors materially change at some point in the future."

Portfolio manager Jeff Jonas of Gabelli Funds, which holds Pfizer shares, said he expected to see deals that could add future branded products, particularly in the highly lucrative oncology area. He cited the recent success of Pfizer's internally developed Ibrance breast cancer drug.

Jonas expects Pfizer to follow its decision to buy Medivation Inc <MDVN.O> for $14 billion with more deals of "that size or smaller." It bought Medivation for its blockbuster prostate cancer drug Xtandi.

Pfizer's $160 billion deal to buy Irish drugmaker Allergan Inc <AGN.N> collapsed in April after a change in U.S. law had negated the tax benefits for companies moving corporate headquarters overseas.

Investors said they did not believe Pfizer's current strategy includes any Allergan-sized deals.

Pfizer said the decision against a split would not affect its 2016 financial forecast. Its shares were down 2.1 percent at $33.55 in afternoon trading, amid a 1.5 percent decline in the ARCA Pharmaceutical Index of large drugmakers <.DRG>.

Investors had been expecting the company to step back from the split, Sanford Bernstein analyst Tim Anderson said in a research note.

Pfizer began openly planning for a possible split in early 2014, saying it would track the two divisions' progress for three years before reaching a decision. In August, it said it would decide by year-end.

The company had considered the split largely because its patent-protected medicines routinely enjoyed sales growth while demand for its generics typically declined.

However, Pfizer's $15 billion purchase of Hospira a year ago bolstered the company's wide array of generics, such as the once top-selling cholesterol drug Lipitor. Hospira makes generic injectable hospital products and biosimilars, which are cheaper versions of the world's leading biotech drugs.

Annual sales of Pfizer's generic portfolio should grow by a single-digit percentage rate in coming years, JPMorgan analyst Chris Schott said in a research note. He forecast a 3 percent rise in the company's overall annual sales through 2020, resulting in 8 percent earnings growth.

(Reporting by Natalie Grover in Bengaluru and Caroline Humer and Bil Berkrot in New York; Editing by Savio D'Souza and Lisa Von Ahn)