Pfizer's Dividend Risks Heighten Amid Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 14 hours ago
0mins
Source: Fool
- Attractive Dividend Yield: Pfizer's current dividend yield stands at 7%, which, while enticing to investors, may indicate deeper issues as the stock has plummeted 60% from its 2022 peak, reflecting market concerns about future performance.
- Earnings and Payout Ratio: With an estimated earnings per share of $2.99 for 2023 and a dividend payout of $1.72, Pfizer's payout ratio appears healthy at 57%; however, projected cash flow shortfalls in 2025 raise red flags about its ability to sustain dividends.
- Patent Cliff Risks: Pfizer is approaching a patent cliff that could result in a $17 billion revenue loss by 2030, particularly with the expiration of its top-selling drug Eliquis in 2025, posing significant financial challenges ahead.
- Tight Cash Flow: Although Pfizer has $13 billion in cash reserves, the uncertainty surrounding future cash flows and the inability to cover dividends could undermine investor confidence in the sustainability of its dividend payments.
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Analyst Views on PFE
Wall Street analysts forecast PFE stock price to rise
16 Analyst Rating
5 Buy
11 Hold
0 Sell
Moderate Buy
Current: 24.320
Low
24.00
Averages
28.56
High
35.00
Current: 24.320
Low
24.00
Averages
28.56
High
35.00
About PFE
Pfizer Inc. is a research-based, global biopharmaceutical company. The Company is engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. Its Biopharma segment includes the Pfizer U.S. Commercial Division, and the Pfizer International Commercial Division. Its product categories include oncology, primary care and specialty care. Its oncology products include Ibrance, Xtandi, Padcev, Adcetris, Inlyta, Lorbrena, Bosulif, Tukysa, Braftovi, Mektovi, Orgovyx, Elrexfio, Tivdak and Talzenna. Its primary care products include Eliquis, Nurtec ODT/Vydura, Zavzpret, the Prevnar family, Comirnaty, Abrysvo, FSME/IMMUN-TicoVac, Nimenrix, Trumenba, and Paxlovid. Its specialty care products include Xeljanz, Enbrel (outside the United States and Canada), Inflectra, Abrilada, Cibinqo, Litfulo, Eucrisa, Velsipity, the Vyndaqel family, Genotropin, and others. Its PF-08653944 is an ultra-long-acting fully biased GLP-1 receptor agonist.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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