Pfizer dividend sustainability remains supported by cash flow

Pfizer is facing scrutiny regarding the sustainability of its dividend following a period where its stock price declined significantly from its 2021 peak. While the company's payout ratio relative to earnings exceeds 100%, analysts suggest the dividend may remain secure when evaluated through cash flow.

Pfizer's cash dividend payout ratio is approximately 90%, supported by nearly $12.7 billion in cash and short-term investments as of the end of the second quarter. The company reported paying roughly $4.9 billion in dividends during the first half of the year. Management has expressed a desire to maintain the dividend in the near term, even as the company navigates patent expirations and the search for new revenue-generating drugs.