Pfizer’s Dividend Yield Advances to 3.8% (PFE)
By: Ned Piplovic,
Pfizer, Inc. (NYSE:PFE) continues to reward its shareholders with above-average dividend yield and produced a double-digit-percentage total return on investment for the past 12 months.
In addition to boosting its annual dividend for the past eight consecutive years, the company hiked its annual payout 18 times over the past two decades. Over the eight-year dividend growth streak, the company managed to boost its annual dividend at an average rate of more than 8% per year.
The company will distribute its next dividend on June 1, 2018, to all its shareholders of record prior to the May 10, 2018, ex-dividend date.
Pfizer, Inc. (NYSE:PFE)
Founded in 1849 and headquartered in New York City, Pfizer Inc. discovers, develops, manufactures and sells health care products worldwide. The company operates through two segments — Pfizer Innovative Health (IH) and Pfizer Essential Health (EH).
The Innovative Health segment focuses on the development and commercialization of medicines, vaccines and consumer health care products for application in internal medicine, vaccines, oncology, inflammation, immunology and rare diseases. Additionally, this segment provides products for consumer health care, such as dietary supplements and pain management, as well as gastrointestinal, respiratory and personal care. This segment markets its products under several well-known brands, including Prevnar 13, Eliquis, Lyrica, Viagra, Advil and Centrum.
The Essential Health segment offers products that will lose or have lost marketing patent protection, branded generic products, sterile injectable products and infusion systems. It provides products under the Lipitor, Premarin family, Norvasc, Lyrica, Celebrex and Pristiq brand names.
The company boosted its quarterly payout 6.3% in the previous quarter from $0.32 in the fourth quarter of 2017 to the current $0.34 quarterly payout. This current distribution corresponds to a $1.36 annualized dividend and currently yields 3.8%. Pfizer’s 3.8% yield is 13% above the company’s own five-year average yield of 3.4%. Additionally, the company’s current yield is more than five-fold ahead of the 0.73% average yield for the entire Health Care sector. In addition to outperforming the sector average, Pfizer’s current 3.8% yield is nearly 40% higher than the simple average yield for all the companies in the Drug Manufacturers market segment and even 3% higher than only dividend-paying companies in the same group.
For the past two decades, the company cut its quarterly dividend only once, when it halved its quarterly payout in the second quarter of 2009. However, the company resumed hiking its quarterly dividend in the first quarter of the following year. By the first quarter of 2017, the company’s quarterly payout was back to the same $0.32 amount that it was in the first quarter of 2009, prior to the dividend cut.
Since resuming its annual dividend hikes eight years ago, the company enhanced its annual dividend at an average growth rate of 8.3% and nearly doubled its total annual payout since 2010. Even with a 50% quarterly dividend cut in 2009, Pfizer advanced its total annual dividend nearly 440% and maintained an average annual growth rate of 8.5% per year over the past two decades.
At the beginning of the trailing 12-month period, the share price dropped 5.5% and reached its 52-week low of $31.75 on June 8, 2017. After bottoming out in early June 2017, the share price climbed nearly 23%, and reached its 52-week high of $39.05 after a one-day spike of more than $2 on January 29, 2018. Unfortunately, the high price reversed direction immediately and fell below the $37 mark by Jan. 31. The share price continued to fall with the overall market until it reached $33.63 on February 8, 2018, to trade virtually even with the share price from the beginning of the trailing 12-month period.
Since the early-February drop, the share price experienced moderate volatility, but maintained an overall growth trend. On May 1, 2018, the share price closed at $35.40, which was 9.3% below the January peak, 5.3% higher than it was 12 months earlier, 11.5% above the 52-week high from June 2017 and 23% higher than it was five years ago.
Over the past 12 months, the company’s dividend income distributions and its asset appreciation combined for a 12.8% total return on shareholder’s investment. The total return over the past three years was nearly 19% and 46% over the past five years.
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