Some income investors might view Pfizer (PFE 0.55%) stock as a falling knife to be avoided. After all, the big drugmaker's share price has already plunged more than 20% so far this year. Pfizer just reported steep revenue and earnings declines in its first-quarter update. It's guiding for revenue to sink by 31% in full-year 2023.

However, I think that there's a lot more to like about this pharmaceutical giant than meets the eye. In fact, Pfizer is one of the best high-yield dividend stocks you can buy today.

About Pfizer's dividend

Different investors have different definitions of exactly what a high dividend yield is. My view is that any yield above the U.S. 10-Year Treasury yield qualifies. Currently, that's a little over 3.4%. Pfizer's yield of more than 4.2% easily tops that threshold.

Income investors shouldn't only focus on dividend yield, though. They also need to evaluate the sustainability of a company's payouts. That's one area where Pfizer especially stands out.

Its dividend payout ratio is only 29% right now. That gives Pfizer a lot of room to increase its payouts. But could its declining revenue and its pending $43 billion acquisition of Seagen put that dividend in jeopardy? Nope.

On the contrary, I expect Pfizer's management to continue raising its dividends. The company distributed nearly $9 billion in dividends in 2022. Even at the low end of its guidance for 2023, Pfizer should generate adjusted earnings of close to $19 billion.

Pfizer's management also continues to emphasize the dividend program. CEO Albert Bourla said in the Q1 conference call that one of the three pillars of Pfizer's capital allocation strategy is "growing and paying dividends." And CFO David Denton stated in the Q1 press release, "We expect our strong balance sheet will continue to provide the flexibility for future dividend increases and share repurchase activity, as well as additional business development activity."

Better growth prospects than you might think

Income investors usually aren't as concerned about the growth prospects for stocks they own. However, they should be glad to know that Pfizer's top-line growth prospects are better than they might seem at first glance.

Pfizer expects to generate an additional $20 billion in annual revenue by 2030 from new products launched through the first half of 2024. The company is already off to a great start with its launch of Cibinqo as a treatment for atopic dermatitis in adolescents. It also recently won FDA approval for the migraine drug Zavspret, and gained approval for the pneumococcal vaccine Prevnar 20 to be administered to kids.

The company has four other products for which regulatory submissions have already been accepted, among them, its respiratory syncytial virus (RSV) vaccine for maternal immunization of infants. Pfizer should have a great chance of capturing a big chunk of the $10 billion RSV market.

Another $25 billion in annual revenue could come from business development deals. Pfizer expects its acquisition of Seagen to help tremendously in achieving that goal, contributing an anticipated $10 billion in risk-adjusted additional revenue by 2030.

Don't write off Pfizer's prospects in COVID-19, either. The company thinks that its combination COVID-flu vaccine could be a big winner beginning in 2025. It also believes that Paxlovid will continue to generate significant revenue for years to come. 

Short term vs. long term

You probably shouldn't anticipate any huge gains for Pfizer stock over the short term. The company expects that sales of its COVID products will be significantly lower in the second quarter. Worries about the possibility of a U.S. recession could also weigh on the stock.

However, the long-term picture for Pfizer looks encouraging. Revenue and earnings growth should return. Its dividend should increase. I think that Pfizer truly is one of the best high-yield dividend stocks right now. That might not last for too much longer, though, if more investors realize just how attractive the stock's risk-reward proposition is.