We recently published a list of the 10 Safe Dividend Stocks with Yields Above 5%. In this article, we are going to take a look at where Pfizer Inc. (NYSE:PFE) stands against other safe dividend stocks.
Dividend-paying stocks have long held a special place among investors, often delivering stronger returns than the broader market over time. Within this strategy, there’s an ongoing debate between those prioritizing high yields and others who focus on companies with a steady track record of dividend growth. While analysts tend to favor firms that consistently boost shareholder payouts, the allure of high yields remains strong. Experts caution, however, that investors should avoid yield traps and instead target companies that combine attractive yields with reliable dividend increases.
A study by Newton Investment Management lends weight to the case for high-yield stocks. It found that during inflationary periods from 1940 to 2021, high-yield dividend stocks outpaced the broader market. The report also showed that portfolios with high-dividend-yielding stocks performed better than those with little or no dividend exposure. Specifically, high-yield portfolios outperformed low-yield portfolios by 199 basis points and zero-yield portfolios by 330 basis points in terms of value-weighted returns. However, the study didn’t explore the specific market conditions behind these results, offering more of a general overview.
Further backing the benefits of high-yield stocks, Hartford Funds conducted research looking at risk and return over the long haul. From December 1969 to March 2024, high-yield portfolios returned an average of 12.3% annually, compared to 10.5% for mid-yield and 9.7% for low-yield portfolios. When measured by annualized standard deviation—a common gauge of volatility—high-yield portfolios also showed lower risk (14.1%) than their mid-yield (16%) and low-yield (20.8%) counterparts.
Analysts note that dividend stocks can offer a layer of stability during market turbulence, especially when investors prioritize income. Still, they advise sticking to high-yield stocks only if they come with a proven record of dividend growth.
That said, this isn’t a hard rule. Many companies manage to offer both solid yields and consistent dividend increases. High yields, in themselves, aren’t a red flag—in fact, dividend yield plays a vital role in income-focused investing by showing the income potential relative to a stock’s price.
Amid the growing excitement around AI and tech stocks, dividend-paying companies have somewhat fallen off investors’ radar. However, the recent market downturn has brought them back into focus. Since the beginning of 2025, the Dividend Aristocrats Index, which tracks the performance of companies with 25 consecutive years of dividend growth, has fallen by over 2% while the broader market has slipped by nearly 10%.
Over the long haul, the strength of these dividend-focused stocks becomes even more evident. A report by S&P Global revealed that from January 2000 through February 2025, the Dividend Aristocrats Index outpaced its benchmark by an average of 1.59% annually. This consistent outperformance is largely credited to the solid fundamentals of the companies that make up the index.
A medical technician wearing protective gloves and a mask mixing a biopharmaceutical solution.
Our Methodology:
For this list, we scanned Insider Monkey’s database of over 1,000 hedge funds as of Q4 2024 and picked dividend stocks with strong dividend policies and sound financials. From that group, we picked stocks that have yields above 5%, as of April 20. The stocks are ranked in ascending order of their dividend yields.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Pfizer Inc. (NYSE:PFE)
Dividend Yield as of April 20: 7.77%
Pfizer Inc. (NYSE:PFE) is an American multinational pharmaceutical and biotech company that offers a wide range of related products and services to its consumers. On April 14, the company informed investors that it would discontinue the development of danuglipron, its oral GLP-1 drug candidate for weight loss. While the decision to halt the danuglipron program is a setback, it doesn’t mark the end of Pfizer’s pursuit of breakthrough treatments in the weight-management space. The company is still advancing another option—an oral GIPR antagonist, currently in phase 2 trials and referred to as PF-07976016. More updates on this candidate are expected in the future.
Pfizer Inc. (NYSE:PFE) has been stepping up its efforts in the oncology space, highlighted by its $43 billion acquisition of Seagen, which aims to strengthen its cancer treatment portfolio. The company is targeting substantial growth in this segment over the next five years, with plans to double the number of patients it reaches by 2030. Pfizer also intends to launch at least three cancer drugs that each have the potential to bring in over $1 billion annually. This strategy is already yielding results, with oncology revenue rising 25% in 2024.
Known for its reliable dividend history, Pfizer Inc. (NYSE:PFE) continues to reward shareholders. The company currently pays a quarterly dividend of $0.43 per share, following a 2.4% increase announced in December 2024, which marked its 15th straight year of dividend growth. As of April 20, the stock has a dividend yield of 7.77%.
Overall, PFE ranks 1st on our list of the safe dividend stocks with yields over 5%. While we acknowledge the potential of PFE as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than PFE but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
