Pfizer Is Down 34% Over the Last 5 Years. Here's Why Its 6% Dividend Yield Might Finally Be Worth the Risk.
Pfizer has been going through a period of transition.
Overview
If you've been looking for high-yield stocks, Pfizer (NYSE: PFE) may have crossed your radar screen. As shares of the pharma giant slipped over the past few years, its dividend yield marched higher, and in recent times, settled at 6%.
High dividend yields are great, but the pattern of a dividend yield rising as the stock price falls could be a warning sign. That's because a declining stock price may signal business troubles. This, in and of itself, is negative, but it also suggests that, if the financial situation is rough, the company may not be able to maintain its dividend.
Details
In the case of Pfizer, the pharma giant has indeed faced difficult times over the past few years. Demand for its coronavirus products has been on the decline from early pandemic levels, and the company lost exclusivity on a number of blockbusters. The company launched a cost realignment plan, which was positive news, but such plans take time, and it's not guaranteed that the most important goals will be met.
Source
Originally published at www.fool.com.