If you're a long-term investor, why should you be paying closer attention to pharmaceutical giant Pfizer (PFE 0.48%)? Because of its dividend, of course! Pfizer's dividend yield is hovering around a mouth-watering 7%!
Let's put that yield in perspective. The S&P 500 index, which represents America's biggest companies, has an average dividend yield of around 1.2%. A $1,000 investment in the S&P 500 would yield $12 annually. With a 7% yield, a $1,000 investment would generate about $70 in income annually, while a $10,000 stake would generate $700. That's a nearly 6x difference.
Image source: Getty Images.
Better still, healthy and growing dividend-paying companies tend to increase their payouts over time -- often annually. Pfizer (or one of the companies it has merged with over the years) has paid a dividend for 347 consecutive quarters (that's almost 87 years!) and has increased its payout for 15 consecutive years.
NYSE: PFE
Key Data Points
A fat dividend shouldn't be the only factor driving your investment decision, though. So -- is Pfizer a worthy investment? Well, its recent valuation suggests so. Its recent forward-looking price-to-earnings (P/E) ratio of 8 is well below its five-year average of 10. It also has a robust pipeline of drugs in development, some of which will likely gain FDA approval and sell well. (Not all will, though.) Says the company: "With over 50+ programs, 80+ clinical trials worldwide and 40% of our R&D budget dedicated to oncology, we're committed to advancements in cancer care."
Pfizer's second quarter featured revenue increasing 10% year over year, and earnings per share jumping 30%. Management noted that "We raised our full-year 2025 adjusted diluted EPS guidance, demonstrating confidence in our ability to execute against our strategic priorities and deliver strong results for shareholders."
If you're looking for income, give this blue chip stock a closer look. Pfizer's future is not guaranteed to be golden in the years ahead, but it certainly has potential.
