Key Takeaways
- A $750,000 portfolio split evenly across Pfizer, Altria and Realty Income pays $42,905 a year in dividends at current prices, or $3,594 a month.
- Altria and Realty Income cover their dividends with room to spare, at 78% of free cash flow and 75% of AFFO.
- Pfizer’s dividend has the least cushion, at 89% of its free cash flow over the twelve months to June.
- If Pfizer halved its dividend, this income would fall to $2,983 a month. If it stopped paying, the income would fall to $2,372.
Pfizer (PFE), Altria Group (MO) and Realty Income (O) all yield more than 5% today. For a retiree who lives on dividends, that’s a real paycheck.
Let’s take a hypothetical 67-year-old who puts $750,000 into the three, $250,000 apiece, at Monday’s midday prices. Buying whole shares leaves $137.04 in cash. The rest pays $43,124.24 a year, or $3,593.69 a month, a 5.75% yield.
But each check is only as safe as the cash behind it, and the three cushions look very different:
| Stock | Shares | Cost | Income a year | Share of income | Coverage |
|---|---|---|---|---|---|
| Pfizer | 8,671 | $249,976.80 | $14,654.40 | 34% | 89% of free cash flow (TTM) |
| Altria | 3,186 | $249,938.46 | $14,745.24 | 34% | 78% of free cash flow (TTM) |
| Realty Income | 4,247 | $249,947.70 | $13,724.60 | 32% | 75% of AFFO (fiscal 2025); 73% expected for 2026 |
Source: TIKR and StockAnalysis. Prices are at 12:31 p.m. ET on Nov. 9, 2026. Pfizer’s and Altria’s coverage is the cash dividend payout ratio over the twelve months to June 28 and Sept. 30, 2026. Realty Income’s is the AFFO payout ratio.
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Pfizer’s cushion is thin
Pfizer’s $14,654.40 a year has the least room behind it. Over the twelve months to June 28, 2026, it paid $9.79 billion of dividends out of $10.98 billion of free cash flow, a risky 89%. In fiscal 2025, the ratio was 107.7%.
The cushion was huge in fiscal 2021 and 2022, when free cash flow hit $29.9 billion and $26.0 billion. Since then, free cash flow has fallen short of the dividend in two of three years.
But the business looks better than that chart does. In the third quarter of 2026, launched and acquired products grew 32% operationally while Paxlovid fell 63%. On Nov. 3, Pfizer raised its 2026 revenue guidance to $62.0-$64.0 billion, from $60.5-$62.5 billion. The dividend itself has grown slowly: 2.5% a year from fiscal 2020 to fiscal 2025 ($1.52 to $1.72 a share).
Altria’s cushion barely moves
Altria’s check is about the same size, $14,745.24 a year, and it rests on much firmer ground. Over the twelve months to Sept. 30, 2026, it paid $7.12 billion of dividends out of $9.07 billion of free cash flow, a steady 78%. That compares with 76.7% in fiscal 2025. The ratio stayed between 74.6% and 82.0% from fiscal 2021 to fiscal 2025, and free cash flow has covered the dividend every year since fiscal 2018.
In August, Altria raised its quarterly dividend 4.7% to $1.11 a share, its “61st increase in 57 years.” It aims for mid-single-digit dividend growth each year through 2028. That follows 4.1% a year from fiscal 2020 to fiscal 2025 ($3.40 to $4.16 a share).
And the business is keeping pace. On Oct. 29, Altria raised its 2026 adjusted EPS guidance to $5.66-$5.74, growth of 4.5% to 6.0% from $5.42 in 2025.
The risk is the core business. Domestic cigarette shipments keep falling, and third-quarter net revenue rose just 1.0%, to $6.1 billion.
Realty Income’s check comes every month
Realty Income’s check is the smallest, $13,724.60 a year, and it’s the only one paid monthly. The dividend took 75% of AFFO per share in fiscal 2025 ($3.22 of $4.28), and analysts’ $4.45 for 2026 puts the ratio at 73%.
That cushion has widened over the past decade.
AFFO per share rose from $2.88 in fiscal 2016 to $4.28 in fiscal 2025, faster than the dividend. So the payout ratio fell from 83.0% to 75.2%. On Nov. 2, Realty Income raised its 2026 AFFO guidance to $4.45-$4.46 a share. In September, it announced its “116th consecutive quarterly dividend increase.” The raises are small, though: 2.9% a year from fiscal 2020 to fiscal 2025 ($2.79 to $3.22 a share).
The risk is debt: about $2.9 billion matures in 2027 at a rate below 3%, and rates are higher now.
A Pfizer cut would sting
Pfizer is the one to test, since its coverage is the thinnest. If it halved its dividend, this portfolio would pay $35,797.04 a year, or $2,983.09 a month. If it stopped paying, the income would fall to $28,469.84 a year, or $2,372.49 a month.
Management is confident it won’t come to that. On Pfizer’s second-quarter call, CEO Albert Bourla said, “We feel extremely confident that we will — even the most stretched scenarios that we are running, we will be able to maintain our dividend.”
Note the word “maintain.” With the $0.43 quarterly dividend it declared on Oct. 6, Pfizer pays $1.72 a share this year, the same as in fiscal 2025. And Ibrance, Xtandi and Eliquis outside the US are still headed for patent losses.
Two checks I’d count on, one I’d watch
Altria’s and Realty Income’s checks look safe and growing to me. Pfizer’s check is stretched. Its new products are working, but a dividend with that little cushion leaves 34% of this retiree’s income with not much margin for error.
The next number to watch is Pfizer’s 2027 guidance. CFO Cecile Guegan said on the third-quarter call that it will reflect two of its drugs entering Medicare’s negotiated-price program that year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
