Pfizer offers a 6% dividend and is at a yearly high. Is the stock still cheap?
Pfizer's stock $PFE climbed to a 52-week high around $29 in early September 2026 and has added roughly 18% since the start of the year. Back in 2022, the company brought in over $56 billion from the COVID vaccine and pill alone, then the pandemic winds died down and the stock went nowhere for years. Yet today it carries a dividend yield around 6%, a level the market usually assigns to troubled companies. Moreover, it trades at less than ten times adjusted earnings.
Key points
The paradox of 6% at a yearly high. The stock is at a 52-week high, yet the yield is typical of a distressed company. This article won't resolve that tension in a single sentence, but it will show where it comes from.
Cheap, or just looks cheap? The difference between adjusted and GAAP earnings makes one stock into two differently priced companies. Which number is "correct" is not as clear-cut as it sounds.
The patent expiration wave is only beginning. Billions in revenue are at risk, led by Eliquis. The question is not whether, but how fast, and what it will do to the dividend.
Two expensive bets, still unproven. Both Seagen and Metsera were meant to replace the shortfall, but one big test just failed. Whether that turns around will be decided by the next round of data.
6% for waiting, or for risk? Dividend safety isn't determined by the payout ratio, but by whether Pfizer can sustain free cash flow through the patent expiration wave. Last year's figure sent the first warning signal.
A simple conclusion offers itself: a cheap stock with a fat dividend. Pfizer may not look cheap despite its problems, but precisely because of them. Its biggest test, the wave of patent expirations on its most important drugs, is only beginning. So the question for investors isn't whether the dividend is high, but whether that 6% pays them for patient waiting, or for the risk of several years of stagnation.
A new company is growing beneath stagnant revenue
What the second quarter showed
In the second quarter of 2026, Pfizer reported revenue of $15.03 billion, up 3% year-over-year, of which operational growth was only 1% and the rest came from a weaker dollar. Adjusted earnings per share reached $0.77, beating the expected consensus of about $0.68. On a reported, GAAP basis, however, the quarter ended with a net loss of $0.04 per share due to a one-time write-off related to the failure of one oncology program.
More important than any single number is the direction. The company raised the lower end of its full-year revenue guidance to $60.5–62.5 billion and confirmed adjusted EPS of $2.80–3.00. The composition of that revision is actually the opposite of what one would expect. It raised expectations for non-COVID products by about $1.5 billion, while cutting the revenue outlook for COVID products to about $4 billion from the original $5 billion. Guidance rose despite weaker COVID, not because of it. Pfizer no longer needs a pandemic comeback to grow. Excluding Comirnaty and Paxlovid, revenue grew 5% operationally.
Who is really driving Pfizer today
Beneath the surface of stagnant total revenue lies a second, fast-growing company. The group of recently launched and acquired products grew 18% operationally in the second quarter, while the older portfolio declined. That's the point that the overall +1% conceals.
The drivers are specific drugs. The anticoagulant Eliquis, Pfizer's largest single source of revenue, brought in $2.425 billion in Q2, up 21% year-over-year, driven mainly by higher prices in the US. Pfizer develops and sells the drug together with Bristol Myers Squibb $BMY, so it books only its share of the alliance revenue. The fact that it is growing double digits even after exclusivity expired in Europe and generics are entering is so far held up mainly by higher US prices, not higher volumes. But the pricing cushion is not infinite.
The oncology drug Padcev, acquired with the Seagen purchase, grew 23% operationally, lung cancer drug Lorbrena grew 37%, and the Vyndaqel family in cardiology grew 8%. For the first half of the year, migraine drug Nurtec added 28% and the respiratory vaccine Abrysvo 42%.