Key Takeaways
- Pfizer yields 6.3% and Clorox yields 6.1%, and both told investors in August that they’re standing by their dividends.
- Pfizer’s dividend took 89% of its free cash flow over the twelve months to June 2026, while Clorox’s took 149%.
- Clorox’s net debt rose to 4.3x EBITDA in fiscal 2026 after its GOJO deal, against 2x for Pfizer.
- Pfizer’s patent losses weigh on revenue through 2028, and Clorox is counting on its cash flow recovering in fiscal 2027.
Any investor hunting for a dividend yield above 6% is going to run into Pfizer (PFE) and Clorox (CLX) sooner or later.
Both reported in early August, and both told investors they’re standing by the dividend. Pfizer is heading into patent losses that run through 2028, and Clorox’s fiscal 2026 free cash flow fell short of what it paid out in dividends.
So which is the better high-yield dividend stock?
| Metric | Pfizer (PFE) | Clorox (CLX) |
|---|---|---|
| Dividend yield | 6.3% | 6.1% |
| Annual dividend | $1.72 a share | $5.00 a share |
| Dividend growth, 5 years | 2.5% a year (fiscal 2020–2025) | 2.0% a year (fiscal 2021–2026) |
| Cash dividend payout ratio (TTM) | 89% | 149% |
| Net debt/EBITDA | 1.97x | 4.29x |
| Interest coverage | 6.98x | 6.84x |
| Forward P/E | 10.0x | 14.6x |
Pfizer’s cash is catching back up
Pfizer’s business is in the middle of a handoff. Its launched and acquired products grew 18% operationally in the second quarter of 2026. Pfizer also raised its 2026 revenue guidance by $500 million at the midpoint, to $60.5 billion to $62.5 billion.
The cash behind the dividend has shrunk along the way. Free cash flow went from $29.9 billion in fiscal 2021 to $9.08 billion in fiscal 2025, short of the $9.77 billion Pfizer paid in dividends that year.
Over the twelve months to June 28, 2026, the dividend took 89% of free cash flow. That’s covered, though not by much. CEO Albert Bourla was blunt on the Aug. 4 call: “even the most stretched scenarios that we are running, we will be able to maintain our dividend.” He added that growth would resume once Pfizer is through its patent losses.
The risk is those patent losses, which weigh on revenue through 2028.
Clorox’s dividend is outrunning its cash
Pfizer’s free cash flow is back above its dividend, and Clorox’s has slipped below it. Clorox’s net sales fell 5% to $6.72 billion in fiscal 2026 (the year to June 30), and adjusted EPS fell 28% to $5.53 from $7.72.
For fiscal 2027, it expects net sales up 13% to 14%, including about 9.5 points from the GOJO acquisition. It also expects adjusted EPS of $5.70 to $6.00.
The cash went the wrong way first. Free cash flow fell from $761 million in fiscal 2025 to $405 million in fiscal 2026, against $602 million of dividends.
That’s a 149% cash dividend payout ratio over the twelve months to June 30, 2026, a dividend the business didn’t cover. It’s also the third year of the last five in which dividends outran free cash flow. Even cash from operations, $612 million in fiscal 2026, barely topped the $602 million of dividends. CFO Luc Bellet said “our commitment to support the dividend has not changed,” and added that “the current payout is a bit elevated, but we see this as something more transitory as we rebuild our gross margin and not something structural.”
The risk: CEO Linda Rendle expects “the operating environment to remain challenging, with continued cost volatility and a value-seeking consumer.”
So which dividend wins?
Pfizer is the better high-yield dividend stock. It pays the bigger yield, covers that yield from free cash flow, and carries far less debt. Clorox’s net debt jumped from 1.8x EBITDA in fiscal 2025 to 4.3x in fiscal 2026, after the GOJO deal closed April 1.
That’s well above the 1.8x to 2.7x Clorox carried from fiscal 2022 to fiscal 2025, and more than double Pfizer’s 1.97x. Clorox’s debt is about $5.1 billion after it paid $2.147 billion for GOJO and $476 million for a Glad stake, and S&P cut its rating to BBB in February 2026.
On income, $10,000 in Pfizer pays $630 a year today, against $610 for Clorox. At each company’s 5-year rate of dividend growth, that becomes about $787 in year 10 for Pfizer, a 7.9% yield on your cash today, and about $730, or 7.3%, for Clorox. (Pfizer’s growth is on hold until its patent losses play out, so that edge isn’t guaranteed.)
Clorox’s case is a real one. Management calls the high payout transitory and plans to repay its debt “with the free cash flow that we’ll generate over the next 12 to 18 months.” It’s just that Pfizer’s dividend is covered by the cash the business generates today. Clorox’s depends on a recovery that hasn’t reached its cash flow yet, and that a new CEO will have to deliver: on May 28, Clorox said Linda Rendle will step down for health reasons once a successor is appointed.
Of course, if Clorox’s free cash flow rebounds in fiscal 2027 and that debt comes down on schedule, this duel gets a lot closer.
So what is Pfizer stock actually worth?
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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!
