Key Takeaways
- Verizon fell 9% on Oct. 9 after SpaceX agreed to buy nationwide wireless spectrum, and it now yields 6.1%, against 5.7% for Pfizer.
- Verizon’s dividends took 52% of its free cash flow over the twelve months to Sept. 30, 2026, while Pfizer’s took 89% over the twelve months to June 28, 2026.
- Pfizer carries less debt, but its dividend is flat in 2026 as its COVID-19 sales shrink and patent expiries approach.
- SpaceX’s plan to become a fourth U.S. wireless carrier is the risk to watch for Verizon.
Verizon Communications (VZ) had its worst day since 2002 on Oct. 9, falling 9% after SpaceX agreed to buy a nationwide block of 800 MHz spectrum for its Starlink Mobile service. Verizon now yields 6.1%.
Three days earlier, Pfizer (PFE) gave income investors news of its own: its 352nd consecutive quarterly dividend, held at $0.43 a share. That’s a 5.7% yield, from a company still replacing the COVID-19 sales that once flooded it with cash.
Both pay well over 5%, and both have raised their dividends slowly, at less than 3% a year from fiscal 2020 to fiscal 2025. So which is the better dividend stock?
| Metric | Verizon (VZ) | Pfizer (PFE) |
|---|---|---|
| Dividend yield | 6.1% | 5.7% |
| Annual dividend | $2.83 | $1.72 |
| Dividend growth, fiscal 2020-2025 | 1.9% a year | 2.5% a year |
| Cash dividend payout ratio (TTM) | 52% (to Sept. 30, 2026) | 89% (to June 28, 2026) |
| Net debt / EBITDA | 3.3x | 2.0x |
| Interest coverage | 4.3x | 7.0x |
Source: TIKR and StockAnalysis, prices as of Nov. 5, 2026.
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Verizon’s cash flow has room to spare
Verizon’s dividends took 52% of free cash flow over the twelve months to Sept. 30, 2026, a well-covered payout for a stock yielding over 6%.
And the business behind it is growing. Mobility and broadband service revenue rose 2.9% in the third quarter of 2026 from a year before, to $23.5 billion, and free cash flow rose 12.1% to $7.8 billion. CEO Dan Schulman puts the gains down to “customer-first offerings like Simplicity and our expanded loyalty program over heavy subsidies.”
Free cash flow has covered the dividend every year since fiscal 2018:
The tightest of those years was fiscal 2022, when dividends took 77% of free cash flow.
Debt is the weak spot: net debt runs at 3.3x EBITDA. Then there’s SpaceX. Bloomberg reported on Oct. 23 that SpaceX is in talks to use at least 80,000 U.S. cell sites, a step toward becoming a fourth nationwide carrier. None of it touches today’s cash flow yet.
Pfizer is paying out nearly all of it
Pfizer has the stronger balance sheet of the two, with net debt at 2.0x EBITDA and interest coverage of 7.0x, against Verizon’s 4.3x. Its cash flow is the problem: dividends took 89% of free cash flow over the twelve months to June 28, 2026, a risky level for a company with patent expiries ahead.
Free cash flow fell below the dividend in fiscal 2023 and fiscal 2025, and barely covered it in fiscal 2024:
That’s a long way down from $29.9 billion of free cash flow in fiscal 2021, at the height of COVID-19 demand.
The newer drugs are picking up the slack. Third-quarter revenue of $16.6 billion beat estimates, sales of launched and acquired products grew 32% operationally, and on Nov. 3 Pfizer raised its 2026 revenue guidance to $62.0 billion to $64.0 billion, from $60.5 billion to $62.5 billion. But Paxlovid fell 63% and Comirnaty 29%, and Ibrance, Xtandi and Eliquis outside the US all face lost exclusivity.
Management talks about holding the dividend more than raising it. CEO Albert Bourla said on Pfizer’s second-quarter call in August that “even the most stretched scenarios that we are running, we will be able to maintain our dividend.” Pfizer’s 2026 dividends come to $1.72 a share, the same as 2025’s.
So which dividend wins?
Verizon is the better dividend stock. It pays the bigger yield and covers it with far more room. Plus, its core business is growing.
$10,000 in Verizon pays $607 a year today, against $570 in Pfizer. Even at Pfizer’s 5-year rate of 2.5% a year, its income wouldn’t pass Verizon’s until about 2038, and with this year’s dividend flat, Pfizer isn’t growing at that pace now.
Verizon’s higher yield doesn’t come at a premium price, either. At 8.7x forward earnings, it trades just under its five-year average of 8.8x:
That’s not to say Pfizer’s dividend is in danger. It has the stronger balance sheet, and its newer drugs are growing fast. It’s just that Verizon covers its bigger check today with room to spare, while Pfizer is still waiting for its new drugs to make up for the old ones.
Of course, SpaceX could still change that. If its spectrum deal wins FCC approval and Starlink Mobile launches on its own airwaves in early 2028, as SpaceX President Gwynne Shotwell is targeting, Verizon’s wireless cash flow will be tested.
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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!
