2 Mega-Dividend Stocks With Yields As High As 7%

Core Insights - Investing in dividend stocks offers a reliable method for generating passive income compared to stocks focused solely on appreciation [1] - Identifying stocks with strong dividend histories and sufficient earnings and free cash flow is essential for sustaining and increasing dividends [1] Company Overview: Pfizer - Pfizer has been pivotal in administering COVID-19 vaccines, which helped the economy recover from the pandemic, but investors are now focused on the company's future growth prospects [4] - In 2023, Pfizer announced a $43 billion acquisition of Seagen to enhance its oncology pipeline, with expectations of generating $10 billion in adjusted revenue by 2030 [5] - The company anticipates a revenue increase of over $20 billion by 2030, countering a projected $17 billion revenue loss due to expiring drug patents [5] - Pfizer is also expanding into weight-loss drugs, acquiring Metsera for up to $7.3 billion, with potential revenue estimates exceeding $5 billion [6] - The company has received a three-year exemption from pharma-specific tariffs, committing to invest an additional $70 billion in U.S. manufacturing and research [6] Dividend Performance - Pfizer has a strong dividend track record, having paid and raised its dividend for 16 consecutive years, with a current yield exceeding 7% [7] - Management is focused on revenue growth and prudent expense management to enhance operating margins while maintaining a trailing 12-month free cash flow yield of nearly 9%, ensuring the dividend is well-covered [7] - Investors can assess a company's dividend sustainability by examining its historical performance, earnings, and free cash flow [8]