The wash-out from the COVID-19 pandemic has been brutal for any pharmaceutical stock. Pfizer (PFE +1.65%) has been no exception. As a vaccine maker, Pfizer has faced headwinds to growth in the last few years. Now, the changing of the guard among United States regulators may prove to be even more challenging, which has scared investors away from the stock.
However, Pfizer remains highly profitable and sports a dividend yield of 6.5%, one of its highest ever. Down 57% from all-time highs, is now a perfect time for dividend investors to buy this pharmaceutical giant?
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Pfizer has short-term headwinds, long-term opportunity
Investors may have thought they were out of the woods as Pfizer lapped revenue lost from the COVID-19 vaccines. It had made a large acquisition of Seagen, a steady grower that develops targeted cancer treatments.
But then, the U.S. government came knocking. Through new mandates, the United States wants to lower drug prices in its home market. This would change the dynamics for the industry, where drugs are generally much more expensive domestically, which fuels international price discounts. Most pharmaceutical giants have been hit by this news, with Pfizer factoring in a revenue decline in 2026.
This is bringing down Pfizer's share price and may be distracting investors from the long-term opportunity for the business and pharmaceuticals as a whole. The company has many irons in the fire, including its recently acquired obesity drugmaker and the growth of the oncology portfolio from the Seagen acquisition. Sure, the company is facing some patent expirations over the next few years, but this is normal for the pharmaceutical industry, where reinvestment in research is required each year to keep the pipeline strong. The company spent over $10 billion on internal research in 2025.
NYSE: PFE
Key Data Points
Time to buy Pfizer stock?
Pfizer now trades at a forward price-to-earnings ratio (P/E) under 10 and a dividend yield of 6.5%. With positive free cash flow, Pfizer will likely be able to maintain this dividend payout while also paying down debt associated with the Seagen acquisition.
The question for investors is whether Pfizer can sustain its dividend growth over the long term. Historically, the company has been able to do so as it expands its drug portfolio, both internally and through acquisitions. Despite headwinds from new U.S. government policies, I believe Pfizer can continue to do so if it expands its cancer drug portfolio and successfully enters the obesity drug market.
Even if it keeps running in place, you will get a dividend yield of 6.5% in the interim. This looks like a good buying opportunity for dividend investors seeking safe assets to add to their portfolios.
