How Concerned Should Income Investors Be About Pfizer's Dividend?

Pfizer's stock has seen a significant decline, with the stock price down more than 50% from its 2021 high. This has led to concerns among income investors about the sustainability of the company's dividend, given its payout ratio is well above 100%. However, while Pfizer's earnings do not currently cover its dividend, the financial impact of dividends is reflected in the cash flow statement rather than the earnings statement.

This means that even if earnings are not sufficient to cover the dividend, Pfizer can still continue to support its payouts. Therefore, for income investors, the attractiveness of Pfizer's 6% yield should be weighed against the company's ability to sustain its dividend, which appears to be a likely scenario.

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