Looking for Cheap Income Stocks? Why Pfizer Belongs on Your Shortlist Right Now
2026-07-19 11:15
•Reuben Gregg Brewer •The Motley Fool
•••• • Axe Capital view
Pfizer's High Yield: Worth a Look But Not Without Risks
Pfizer’s plunge has pushed its dividend yield near 7%, tempting income investors despite looming patent cliffs and pipeline challenges.
Pfizer’s stock has dropped more than 50% since late 2021, driving its dividend yield to an attractive 6.9%. For income hunters, that’s tempting, especially in a low-yield world. But Pfizer isn’t risk-free. Patent expirations and generic competition will pressure revenue in coming years. Its own GLP-1 drug failure highlights the usual uncertainties in pharma pipelines. Management’s commitment to keep paying dividends shows resolve, and buying a promising weight-loss drug candidate is a smart move to revive growth. For South African investors, Pfizer stock doesn’t map cleanly onto our JSE counters, so this is more a play on defensive income outside local currency risk. That said, the USD/ZAR exchange rate volatility could impact returns considerably. If the rand weakens, your dividend payments in rands could rise. But if the rand strengthens, the opposite happens. Watch those FX swings closely if you consider Pfizer for income. this is just my opinion and not financial advice
Buy Pfizer if you want high dividend yield and can tolerate pipeline and currency risks. Otherwise, watch FX (USD/ZAR) and dividend stability before adding exposure.
- Pfizer (PFE)
- USD/ZAR
- Patent expirations eroding revenue
- Rand appreciation diminishing USD dividend income
5/10
Pfizer's stock has fallen over 50% from late 2021 highs, pushing its dividend yield to a historically high 6.9%. While the company faces normal industry headwinds including upcoming patent expirations and disappointing new drug development, management remains committed to protecting the dividend. The company is taking steps to address challenges, including acquiring a weight-loss drug candidate after dropping its own GLP-1 drug. More aggressive dividend investors may find Pfizer's valuation compelling despite risks.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Reuben Gregg Brewer
Categories: Rates, Equities, Capital Returns, Healthcare
Tickers: PFE
Sentiment: Neutral - The article presents a balanced view of Pfizer. While acknowledging legitimate concerns (patent cliffs, failed GLP-1 drug, high payout ratio above 130%), it argues these are normal industry challenges. The company's strong history, management commitment to dividends, and strategic acquisitions to address pipeline gaps suggest the company can navigate current headwinds. The high dividend yield offers value for aggressive income investors, but risks remain for conservative investors.
Keywords: dividend yield, patent expiration, pharmaceutical, GLP-1 drug, income stock, drug pipeline, generic competition
Insights:
- PFE: Neutral: The article presents a balanced view of Pfizer. While acknowledging legitimate concerns (patent cliffs, failed GLP-1 drug, high payout ratio above 130%), it argues these are normal industry challenges. The company's strong history, management commitment to dividends, and strategic acquisitions to address pipeline gaps suggest the company can navigate current headwinds. The high dividend yield offers value for aggressive income investors, but risks remain for conservative investors.