2 hours ago
3
Reuben Gregg Brewer, The Motley Fool
Sat, June 6, 2026 astatine 11:35 AM CDT 4 min read
The S&P 500 index (SNPINDEX: ^GSPC) has a tiny output of 1.1%. The mean pharmaceutical company's output is 1.7%. Those examination points marque Pfizer's (NYSE: PFE) 6.7% dividend output look shockingly large. If you are a dividend investor, is it worthy buying Pfizer, oregon is the hazard of a dividend chopped excessively great? The dividend is astir apt connected stronger crushed than you think.
Who sets Pfizer's dividend policy?
When you boil it each down, the committee of directors decides connected a company's dividend policy. It is wholly up to this group. Obviously, they don't enactment successful a vacuum. The committee consults with a company's CEO and different apical executives earlier making a dividend decision. So, what absorption says is often a bully denotation of what the committee is thinking.
Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »
In Pfizer's case, absorption is making a wide connection that its extremity is to support the dividend. In fact, it stated precisely that connected a first-quarter net descent titled "Invest to Maximize Post-2028 Growth." The dividend was close determination with investing successful probe and development, launching caller products, and making bolt-on acquisitions.
That's not a warrant that the healthcare giant's dividend won't beryllium cut. But it is simply a beardown denotation that the institution understands that dividends are important to its shareholders. And that the extremity is to enactment the existent outgo done what is precise intelligibly a hard period.
Pfizer has a mean concern mismatch
The large contented the institution faces is reasonably mean for a pharmaceutical company. It has patent expirations coming up that volition pb to a gross reduction, and it doesn't person immoderate caller drugs connected the skyline to offset the impact. Patent expirations hap connected a acceptable schedule, but probe and improvement does not. So timing mismatches similar this are reasonably commonplace successful the cause sector.
Pfizer isn't sitting astir hoping for the best. For example, aft its ain GLP-1 weight-loss cause had to beryllium dropped, it rapidly pivoted and bought a institution with a much promising GLP-1 candidate. That shows the institution is inactive laser-focused connected discovering caller drugs successful cardinal areas. But it besides shows that Pfizer has the capableness to determination rapidly and strategically erstwhile needed.
For example, it has besides been creating partnerships. The 2 astir caller agreements are with Chinese companies, 1 connected the GLP-1 broadside and the different for oncology drugs. All in, Pfizer is doing what it needs to bash to woody with upcoming patent expirations.
English (CA) · 
English (US) · 
Spanish (MX) ·