Better Dividend Stock to Buy and Hold: Pfizer or Bristol Myers Squibb?
2026-10-23 09:43
•Keith Speights •The Motley Fool
••••• ••• Axe Cap view
Pfizer vs Bristol Myers: Dividend Yield or Dividend Safety?
Pfizer pays more income today, but Bristol Myers offers a steadier and potentially safer dividend over time.
Pfizer’s juicy 5.8% dividend looks appealing in a low-yield world, especially for income seekers on the JSE eyeing offshore exposure. But their payout ratio over 100% warns the dividend might be funded by borrowing or asset sales, not earnings—risky in pharma where patent expiries can swiftly shrink revenues. Bristol Myers Squibb, offering 4.3%, is less flashy but more disciplined, with a payout ratio near 55% and a solid track record of increasing dividends. Their growth pipeline seems less volatile, a critical factor for keeping dividends reliable. For South African investors, where rand weakness can add currency volatility, the choice boils down to what you want: immediate income (Pfizer) or steadier, longer-term income with growth potential (Bristol Myers). Given the payout risks and patent cliffs, I’m cautious on Pfizer but watching closely. this is just our opinion and not financial advice
Trim Pfizer positions to lock in gains and control downside risk. Consider building a modest holding in Bristol Myers for steadier dividend growth and less payout risk.
- USD/ZAR
- PFE
- BMY
- Pfizer dividend cut due to high payout ratio
- Currency shocks impacting offshore returns for South African investors
6/10
Pfizer offers a higher dividend yield of 5.8% compared to Bristol Myers Squibb's 4.3%, making it more attractive for income investors. However, Bristol Myers Squibb maintains a safer dividend with a 55% payout ratio versus Pfizer's over 100% payout ratio. Both pharma companies face patent cliffs but have growth prospects. The article suggests Pfizer is better for maximizing income, while Bristol Myers Squibb may deliver higher total returns due to lower execution risk.
Our take is based on reporting first published by The Motley Fool.