Drug innovation will spur Pfizer’s dividend

Article Excerpt

PFIZER INC. $42 (New York symbol PFE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.8 billion; Market cap: $243.6 billion; Dividend yield: 3.4%; Dividend Sustainability Rating: Highest; www.pfizer.com) is one of the world’s leading prescription drugmakers. Its top-selling brands include Lyrica (epilepsy), Celebrex (arthritis pain), Prevnar (pneumonia) and Enbrel (rheumatoid arthritis). Eight years of rising dividends Starting with the March 2019 payment, the company will increase its quarterly dividend by 5.9%, to $0.36 a share from $0.34. The new annual rate of $1.44 yields 3.4%. Pfizer has now increased the annual rate each year since 2011. Overall revenue fell 5.3%, from $51.6 billion in 2013 to $48.9 billion in 2015. That decline is partly because the company continues to face more competition from generic drugs as more of its main products lose their patent protection. In response, Pfizer has purchased smaller drugmakers with promising products. Those include its September 2015 acquisition of Hospira for $17 billion. That firm makes copies of biologic drugs that have lost…