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Reuben Gregg Brewer, The Motley Fool
Sat, June 27, 2026 astatine 2:35 PM CDT 4 min read
Pfizer (NYSE: PFE) is offering dividend investors a immense 6.9% yield. To enactment that into perspective, the S&P 500 index (SNPINDEX: ^GSPC) has a tiny 1% output close now, and the mean pharmaceutical stock's output is 1.6%. Dividend lovers volition intelligibly find Pfizer's output attractive.
However, that lofty output is besides a motion that this pharmaceutical institution is profoundly retired of favour connected Wall Street. If you person a semipermanent concern attack that allows you to signifier what I telephone clip arbitrage, you whitethorn privation to see buying this high-yield drugmaker.
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What's incorrect with Pfizer?
Pfizer's banal terms is unsmooth 60% beneath its precocious 2021 high. In fact, the stock terms is little contiguous than it was anterior to the coronavirus pandemic. That's really rather important, due to the fact that Pfizer was 1 of the companies to make a COVID vaccine. In emblematic Wall Street fashion, investors bid up the price, reasoning that COVID would everlastingly beryllium a wellness scourge. Only the satellite learned to unrecorded with the illness, and vaccine income didn't unrecorded up to lofty capitalist expectations.
The banal dropped, arsenic you would expect. However, astatine the aforesaid time, Pfizer has besides been struggling to make caller drugs to regenerate blockbusters that are acceptable to suffer patent extortion successful the adjacent mates of years. Its biggest miss came successful 2025, erstwhile it had to wantonness a GLP-1 weight-loss cause it was moving on. That wasn't a bully look and leaves the institution acold down its manufacture peers, Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO), successful this emerging caller cause category.
Meanwhile, the company's dividend payout ratio sits astatine 130%. There's a bully crushed wherefore dividend investors would beryllium disquieted astir buying this profoundly out-of-favor stock.
Pfizer has worked done hard times earlier
Investors got excessively excited astir Pfizer during COVID. But it looks similar they whitethorn beryllium excessively pessimistic astir the banal today. Yes, Pfizer is struggling, but the problems it faces are truly reasonably mean successful the cause sector. Research and improvement don't enactment connected a acceptable timeline, adjacent though patent expirations do. And Pfizer hasn't fixed up connected uncovering caller drugs. In fact, it has a fig of important cause trials successful the works and, notably, rapidly bought a institution with an charismatic GLP-1 campaigner aft its ain weight-loss cause flamed out. Simply put, it's doing the close things.
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