Here's How Many Shares of Pfizer You Should Own to Make $10,000 in Annual Dividend Income

Core Viewpoint - Pfizer is currently an attractive option for income investors due to its high dividend yield of 7.52% and a strong track record of dividend increases [1][9]. Dividend Calculation - Pfizer's quarterly dividend payment is $0.43 per share, leading to an annualized dividend of $1.72 per share [3]. - To achieve $10,000 in annual dividend income, an investor would need approximately 5,814 shares, requiring an investment of about $132,966 at the current share price of $22.87 [4]. Dividend Growth Potential - Pfizer has a history of increasing dividends, with a recent increase of $0.01 per share marking its 16th consecutive hike [5]. - The management is committed to maintaining and growing the dividend, suggesting potential for future increases [5][9]. Dividend Sustainability - Pfizer's current dividend payout ratio is 122.5%, which raises concerns about sustainability; however, the company generates sufficient free cash flow to support the dividend [6]. - Cost reductions are being implemented to bolster free cash flow, which may help maintain dividend payments [6]. Risks and Opportunities - The company faces potential challenges due to the loss of exclusivity for key products in the coming years, which could impact free cash flow [7]. - Despite these challenges, Pfizer has promising products in its pipeline that could offset potential declines in cash flow [7]. Valuation Metrics - Pfizer's forward price-to-earnings ratio is 7.9, significantly lower than the S&P 500 healthcare sector average of 16.1, indicating a potentially undervalued stock [10]. - The price-to-earnings-to-growth (PEG) ratio is 0.6, suggesting that the stock is attractively priced relative to its growth prospects [10].