June 01, 2025 a 07:46 am
PFE: Dividend Analysis - Pfizer Inc.
Pfizer Inc. stands out with a remarkable dividend yield of 7.63%, indicating a potentially attractive return for yield-focused investors. Despite a challenging payout ratio based on both EPS and Free Cash Flow, Pfizer maintains a robust dividend history with over 54 consecutive years of payouts. Their dividend growth, albeit modest, reflects consistency. However, investors should take note of the high payout ratios and evaluate the sustainability of such distributions in the context of the company's overall financial health.
Overview 📊
Pfizer Inc., a leader in the pharmaceutical sector, presents a compelling dividend profile. With a current yield of 7.63%, the dividend per share stands at $1.68. The company boasts an impressive 54-year history of dividend payments without recent cuts or suspensions.
| Sector | Dividend Yield | Dividend Per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Pharmaceuticals | 7.63% | 1.68 USD | 54 years | None |
Dividend History 🗣️
Pfizer's resilient dividend history showcases its commitment to shareholder returns. The stability over decades is a testament to the company's strong financial foundation, vital for long-term investors relying on consistent income streams.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.86 |
| 2024 | 1.68 |
| 2023 | 1.64 |
| 2022 | 1.60 |
| 2021 | 1.56 |
Dividend Growth 📈
Pfizer's dividend growth is moderate, reflecting its stable yet conservative approach. Over the last 3 years, a minor annual increase is evident, balancing potential with pragmatism.
| Time | Growth |
|---|---|
| 3 years | 2.50% |
| 5 years | 3.13% |
The average dividend growth is 3.13% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 🏦
The payout ratios are crucial indicators of dividend sustainability. Pfizer's EPS-based payout ratio stands at 121.16%, while the Free Cash Flow-based ratio is 101.05%, reflecting potential pressure on future distributions should earnings not improve.
| Key Figure | Ratio |
|---|---|
| EPS-based | 121.16% |
| Free cash flow-based | 101.05% |
These figures suggest potential challenges in maintaining high dividend payouts without increasing profitability or cash flow.
Cashflow & Capital Efficiency 💰
Understanding Pfizer's cash flow alongside its capital efficiency ratios sheds light on its ability to sustain and grow dividends. The table below captures key metrics, illustrating trends in cash reserves and investment returns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 6.55% | 2.95% | 9.06% |
| Earnings Yield | 5.34% | 1.30% | 10.92% |
| CAPEX to Operating Cash Flow | 22.83% | 44.91% | 11.06% |
| Stock-based Compensation to Revenue | 1.38% | 0.90% | 0.87% |
| Free Cash Flow / Operating Cash Flow Ratio | 77.17% | 55.09% | 88.94% |
Pfizer displays moderate cash flow stability with a strong efficiency ratio, crucial for future dividend increases and capital project funding.
Balance Sheet & Leverage Analysis 📉
Examining Pfizer's balance sheet metrics provides insight into its financial stability and debt management strategies, critical for evaluating risk levels associated with dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.72 | 0.80 | 0.36 |
| Debt-to-Assets | 0.30 | 0.31 | 0.18 |
| Debt-to-Capital | 0.42 | 0.44 | 0.27 |
| Net Debt to EBITDA | 3.45 | 7.11 | 0.84 |
| Current Ratio | 1.26 | 0.91 | 1.22 |
| Quick Ratio | 0.92 | 0.69 | 1.00 |
| Financial Leverage | 2.42 | 2.54 | 2.06 |
Pfizer's balance sheet shows manageable leverage levels, but attention to debt maturity and financing costs is necessary to maintain financial stability.
Fundamental Strength & Profitability ✅
Key profitability and strength metrics aid in assessing Pfizer's ability to generate returns and manage costs effectively, essential for both growth trajectory and dividend reliability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.11% | 2.38% | 32.79% |
| Return on Assets | 3.76% | 0.94% | 15.91% |
| Net Margin | 12.62% | 3.62% | 31.27% |
| EBIT Margin | 17.47% | 5.58% | 35.85% |
| EBITDA Margin | 28.49% | 16.34% | 40.90% |
| Gross Margin | 74.19% | 49.25% | 65.77% |
| R&D to Revenue | 17.01% | 18.26% | 11.39% |
Pfizer exhibits strong profitability measures, particularly in earlier years, emphasizing operational efficiency and effective cost management strategies.
Price Development 📊
Dividend Scoring System ⚖️
| Criteria | Score (1-5) | Bar |
|---|---|---|
| Dividend yield | 5 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Overall Score: 28/40
Rating 🔎
Pfizer Inc. presents a mixed dividend profile with a high yield and consistent history but is challenged by current payout ratios. Given the moderate growth and financial constraints, investors should remain cautious and closely monitor future earnings and cash flow improvements. A balanced approach, considering both potential rewards and underlying risk factors, would be prudent.