Pfizer, one of the largest pharmaceutical companies in the world, has a 7.1% dividend yield – significantly higher than the broader market and average healthcare stocks. However, this high yield is largely due to a 55% stock price decline since late 2022.
But what’s behind Pfizer’s decline? Two major issues are at play: reduced trust among consumers, particularly with vaccines, and patent cliffs that will lead to material drops in revenue once generic alternatives become available. To address these challenges, Pfizer is investing in new drugs through internal research and development and making strategic acquisitions, like the recent purchase of Metsera.
While this turnaround appeal might make you consider adding Pfizer’s stock to your portfolio, be cautious: the company has a high dividend payout ratio of 90%, which may not be as secure as expected. Additionally, the board has cut dividends in the past following major acquisitions. So, buy the business, not just the dividend.
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Source: https://www.fool.com/investing/2025/09/28/down-55-should-you-buy-the-dip-on-pfizer