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Investing in dividend stocks requires more than chasing high yields. Companies with attractive yields are only viable investments if they can sustain their payouts.
Recent market trends have demonstrated that even strong-income stocks with impressive yields, such as Walgreens Boots Alliance and Medical Properties Trust, can reduce dividends.
Pfizer (NYSE:PFE) is a resilient choice. Despite recent challenges, long-term investors should remain confident in it. Here’s why.
Pfizer Could Be Your Take, But Why?
Pfizer is a major pharmaceutical and biotechnology industry player based at The Spiral in Manhattan, New York City. Founded in 1849, by German entrepreneur Charles Pfizer and his cousin Charles F. Erhart, the company has a rich history of innovation.
Pfizer is committed to prioritizing health and well-being, aiming to deliver global breakthroughs responsibly.
It’s easy to misinterpret Pfizer’s current financial results. In the first quarter, the company reported $14.9 billion in revenue, a 20% drop from the previous year and a 33% decrease in adjusted earnings per share, down to $0.82 compared to the first quarter of 2023.
However, the exceptional performance in 2021 and 2022 established a high benchmark. When excluding its COVID-19 portfolio, Pfizer’s revenue increased by a solid 11% year over year.
Pfizer’s Long-Term Prospects and Dividend Stability
Though the COVID-19 market is still unpredictable, Pfizer’s income should rise once it settles due to the launch of its new products. Pfizer has excellent long-term possibilities; it is not only a “pandemic stock.”
Over the previous 10 years, Pfizer has raised dividends by 61.54%, offering a forward dividend yield of 5.87%. However, the company’s cash payout ratio of 182.5% could be more sustainable, possibly due to recent acquisitions.
CFO Dave Denton stated during the first quarter earning call: “Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return, and making value-enhancing share repurchases after de-levering our balance sheet.”
Pfizer’s most recent dividend increase highlights its dedication to shareholders. The company’s dividend program will likely continue strong as income and net income recover, providing long-term advantages to those reinvesting dividends.
Looking For A Higher-Yield Opportunity?
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For instance, Basecamp Alpine Notes offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio.
Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.
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This article A Dividend Stock Yielding Over 5% To Buy And Hold Forever originally appeared on Benzinga.com
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