Assessing the Upcoming Dividend and Historical Performance
Pfizer Inc (PFE, Financial) recently announced a dividend of $0.42 per share, payable on 2024-03-01, with the ex-dividend date set for 2024-01-25. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Pfizer Inc's dividend performance and assess its sustainability.
What Does Pfizer Inc Do?
Pfizer is one of the world's largest pharmaceutical firms, with annual sales close to $50 billion (excluding COVID-19 product sales). While it historically sold many types of healthcare products and chemicals, now prescription drugs and vaccines account for the majority of sales. Top sellers include pneumococcal vaccine Prevnar 13, cancer drug Ibrance, and cardiovascular treatment Eliquis. Pfizer sells these products globally, with international sales representing close to 50% of total sales. Within international sales, emerging markets are a major contributor.
A Glimpse at Pfizer Inc's Dividend History
Pfizer Inc has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Furthermore, Pfizer Inc has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pfizer Inc's Dividend Yield and Growth
As of today, Pfizer Inc currently has a 12-month trailing dividend yield of 5.78% and a 12-month forward dividend yield of 5.92%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Pfizer Inc's annual dividend growth rate was 3.60%. Extended to a five-year horizon, this rate increased to 4.60% per year. And over the past decade, Pfizer Inc's annual dividends per share growth rate stands at 6.30%.
Based on Pfizer Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Pfizer Inc stock as of today is approximately 7.24%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Pfizer Inc's dividend payout ratio is 0.89, which may suggest that the company's dividend may not be sustainable.
Pfizer Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pfizer Inc's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Pfizer Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Pfizer Inc's revenue has increased by approximately 34.40% per year on average, a rate that outperforms approximately 90.9% of global competitors. Its 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Pfizer Inc's earnings increased by approximately 82.00% per year on average, a rate that outperforms approximately 96.31% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 25.50%, outperforms approximately 78% of global competitors.
Engaging Conclusion: Pfizer Inc's Dividend Prospects
In conclusion, Pfizer Inc's upcoming dividend, consistent history of dividend payments, and growth in dividend rates paint a picture of a company committed to returning value to shareholders. However, the high dividend payout ratio may raise questions about the long-term sustainability of these payments, despite the company's strong profitability and growth metrics. Investors should weigh these factors, along with Pfizer Inc's robust profitability and growth prospects, when considering the stock for their portfolios. For those seeking additional high-dividend yield opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
