Key Takeaways
- Pfizer yields 5.7% and PepsiCo yields 4.3%, but PepsiCo’s dividend has grown more than twice as fast over the past five years.
- Pfizer’s dividend took 89% of its free cash flow over the trailing twelve months, against 75% at PepsiCo.
- Pfizer held its dividend flat in 2026, and analysts expect its earnings to fall through 2028 as key drugs lose patent protection.
- PepsiCo cut its 2026 earnings guidance on rising input costs, but at each company’s five-year pace, PepsiCo’s income on $10,000 would pass Pfizer’s in about seven years.
Any retiree hunting for dividend income is going to look hard at Pfizer (PFE) and its 5.7% yield. On Oct. 6, it declared its 352nd consecutive quarterly dividend at $0.43 a share. That’s the same $1.72 a year it paid in fiscal 2025.
PepsiCo (PEP) pays a smaller 4.3% yield, but its dividend has grown much faster. It had its own setback on Oct. 8, cutting its 2026 earnings guidance as input costs climbed.
For a retiree who wants a check they can count on, which one deserves the money?
| Metric | Pfizer (PFE) | PepsiCo (PEP) |
|---|---|---|
| Dividend yield | 5.7% | 4.3% |
| Annual dividend | $1.72 | $5.92 |
| Dividend growth, fiscal 2020-2025 | 2.5% a year | 6.9% a year |
| Cash dividend payout ratio (TTM) | 89% | 75% |
| Net debt/EBITDA | 2.0x | 2.0x |
| Interest coverage (EBIT/interest) | 7.0x | 14.9x |
Source: TIKR, Nov. 5, 2026. Payout ratios cover the twelve months to June 28, 2026 (Pfizer) and Sept. 16, 2026 (PepsiCo).
6 safe dividend stocks paying retirees 6%+ yields
There are over 100 stocks paying 6%+ annual dividends today.
But after an extensive investment review leveraging TIKR’s proprietary data, we now believe only six of them are truly safe for retirees.
They’re all yours for free as part of our new investment report, which you can access right here.
Pfizer’s dividend has little room to spare
Pfizer’s newer drugs are carrying more of the load: its launched and acquired products grew 32% operationally in the third quarter. On Nov. 3, Pfizer raised its 2026 revenue guidance to $62 billion to $64 billion, from $60.5 billion to $62.5 billion.
The dividend took a risky 89% of free cash flow over the twelve months to June 28, 2026. That’s actually an improvement. Free cash flow fell from $29.9 billion in fiscal 2021 to $4.79 billion in fiscal 2023, and dividends topped it in two of the last three fiscal years:
CEO Albert Bourla said on the second-quarter call in August: “We feel extremely confident that we will — even the most stretched scenarios that we are running, we will be able to maintain our dividend.”
Maintain is the key word.
More pressure is coming: Ibrance, Xtandi and Eliquis outside the U.S. are set to lose exclusivity.
PepsiCo’s dividend has more room to breathe
Where Pfizer is replacing old drugs, PepsiCo is fixing its home market. Third-quarter net revenue rose 5.6% on strong growth in every international segment.
North America soft drinks are lagging, though. CEO Ramon Laguarta said on the October call, “we’re not satisfied with the performance in the U.S.” The Oct. 8 cut took 2026 core EPS growth to 2.5% to 3.5%, from 5% to 7%.
Its cash looks better: the dividend took a more comfortable 75% of free cash flow over the twelve months to Sept. 16, 2026.
That’s a wider cushion than PepsiCo has had lately. Dividends paid climbed from $4.23 billion in fiscal 2016 to $7.64 billion in fiscal 2025, while free cash flow ranged from $5.42 billion to $7.92 billion:
Dividends topped free cash flow in fiscal 2022 and fiscal 2024, and took 99.6% of it in fiscal 2025.
PepsiCo plans to return $8.9 billion in 2026: $7.9 billion in dividends and $1.0 billion in buybacks, so it has a buyback to trim before it would need to touch the dividend.
Rising input costs are its main risk, especially as its commodity hedges roll off.
So which dividend wins?
For retirees, PepsiCo is the better dividend stock. It covers its dividend with more room to spare, and it earns 14.9x its interest expense, more than double Pfizer’s 7.0x.
Pfizer’s dividend hasn’t grown this year, and analysts expect its normalized EPS to fall from $3.22 in fiscal 2025 to $2.46 in fiscal 2028 as those drugs lose exclusivity:
PepsiCo’s faster growth also closes the income gap. At each company’s growth rate from fiscal 2020 to fiscal 2025:
- $10,000 in Pfizer pays $570 a year now and about $712 in year 10.
- $10,000 in PepsiCo pays $430 now and about $786 in year 10, a 7.9% yield on the original investment.
PepsiCo’s income would pass Pfizer’s around 2033. And Pfizer’s figure assumes yearly raises it didn’t make in 2026.
That’s not to say Pfizer’s dividend is in trouble. It pays $140 more a year on $10,000 today, and its new products are growing fast enough that it just raised guidance. For a retiree who needs the most income right now, that’s a real draw.
It’s just that a dividend eating 89% of free cash flow, with earnings expected to fall, leaves Pfizer little margin for a bad year. PepsiCo has more of it.
Of course, PepsiCo still has to fix its U.S. soft drink business, and its 2027 outlook will show us whether input costs eat into the cash behind its raises.
Forget PepsiCo: 6 safe 6%+ dividend yields you can buy right now
Dividends can hold the key to enormous wealth. But only if you buy the right ones.
Picking the right high-yield dividend stock can be the difference between a dream retirement…and scraping by every month, waiting for the next Social Security check to clear.
We’ve identified six stocks yielding 6%+ that we believe every retiree should know about right now. (And PepsiCo isn’t one of them.)
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!
