Pfizer is defending its 6.19% dividend yield against a shrinking cash cushion as COVID-era revenue collapses, with Chairman and CEO Albert Bourla telling the latest earnings call the company is "extremely confident" it can maintain the payout even in its most stretched scenarios. The company paid $9.77 billion in common dividends against operating cash flow of $11.7 billion and capital expenditures of $2.63 billion in its latest full fiscal year, leaving free cash flow covering the payout by only a thin margin. Comirnaty and Paxlovid revenues fell 59% and 63% respectively in the latest quarter, and management now guides to roughly $1.5 billion of generic and biosimilar erosion, while launched and acquired products generated $3.2 billion in quarterly revenue with 18% operational growth, still short of fully replacing the lost COVID economics. Pfizer carries $60.5 billion in long-term debt against just $976 million in cash and equivalents, with leverage at 2.7 times, net debt to EBITDA at 3.26 and interest coverage of 5.78 times, putting debt service and the roughly $2.45 billion quarterly dividend in direct competition for the same cash. Buybacks have been shelved, with no share repurchases completed and none anticipated, and interim CFO Cecile Guégan reiterated the priority to "maintain, and over the long term, grow the dividend."
Pfizer IncThin free cash flow cushion and $60.5B debt put the 6.19% dividend and $2.45B quarterly payout at risk as COVID revenue collapses.
