Pfizer (NYSE: PFE) has been a nightmare for many investors in recent years. At one point earlier this year, the big pharma stock was nearly 60% below its peak set in late 2021.
However, the narrative for Pfizer appears to be changing. Its shares are up a respectable 9% year to date. The company reported better-than-expected second-quarter results on Tuesday. I think this Q2 update is much more important than only the headline numbers. Here’s how Pfizer just confirmed it’s a dividend investor’s dream stock.
1. A juicy dividend that management supports
Anyone who has followed Pfizer lately knows it offers a high forward dividend yield of over 5.3%. The drugmaker has increased its dividend for 15 consecutive years. Income investors should love that Pfizer’s management appears to solidly support keeping that streak going.
It didn’t take long into Pfizer’s Q2 earnings conference call for CEO Albert Bourla to mention the dividend program. Bourla stressed, “I want to reinforce our commitment to maintaining and growing our dividend over time.”
CFO David Denton brought up the dividend only seconds into his remarks in the Q2 call. When he later discussed Pfizer’s capital allocation strategy, the first thing on the list echoed Bourla’s words about maintaining and growing the dividend. Denton also noted that Pfizer “returned $4.8 billion to shareholders” with its dividend in the first half of 2024.
2. Poised for an improving bottom line
Of course, management support for a dividend doesn’t mean much if a company can’t afford to continue paying dividends at current levels. The good news on this front, though, is that Pfizer is poised to improve its bottom line and make its dividend even safer.
Sure, the big pharma company’s earnings fell 11% year over year in Q2. However, revenue grew for the first time since the fourth quarter of 2022 at the peak of its COVID-19 sales. Importantly, Pfizer raised its full-year adjusted earnings guidance to reflect year-over-year growth of nearly 39% at the midpoint of the range.
Bourla said in the Q2 call that Pfizer expects to deliver at least $4…
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