Key Takeaways
- Pfizer yields 6.3% and Edison International yields 6.5%, and Pfizer raised its 2026 revenue guidance by $500 million at the midpoint in August.
- Pfizer’s dividend took 89% of its free cash flow over the twelve months to June 28, 2026, and its CEO has promised to maintain it, with growth to resume after its patent losses.
- Edison International paid out 51% of its fiscal 2025 normalized EPS as dividends, but it carries 4.0x net debt to EBITDA and California wildfire risk.
- What to watch: Pfizer’s free cash flow as patent losses weigh on revenue through 2028, and whether California tries again on utilities’ wildfire liability after its bill died on Aug. 31.
Any investor hunting for income above 6% is going to come across Pfizer (PFE) and Edison International (EIX). As of Oct. 9, they yield 6.3% and 6.5% on TIKR.
Both gave income investors something to like this summer. On Aug. 4, Pfizer raised its 2026 revenue guidance by $500 million at the midpoint, to $60.5 billion to $62.5 billion. Edison had reported a few days earlier, on July 30: second-quarter core EPS of $1.54, up from $0.97 a year before, with its 2026 guidance of $5.90 to $6.20 reaffirmed.
The cash and earnings behind those two dividends, though, tell very different stories. So which is the better high-yield dividend stock?
| Metric | Pfizer (PFE) | Edison International (EIX) |
|---|---|---|
| Dividend yield (Oct. 9, 2026) | 6.3% | 6.5% |
| Current annual dividend | $1.72 | $3.51 |
| Dividend growth, fiscal 2020–2025 | 2.5% a year | 5.4% a year |
| Cash dividend payout ratio (TTM to June 28, 2026) | 89% | Judged on EPS |
| Payout ratio of normalized EPS (fiscal 2025) | Judged on free cash flow | 51% |
| Net debt/EBITDA (LTM) | 1.97x | 4.0x |
| Interest coverage (LTM) | 6.98x | 3.08x |
Pfizer is promising to hold the line
Pfizer’s top line is holding up better than the company expected. Second-quarter revenue rose 3% to $15.0 billion (1% operationally), as launched and acquired products grew 18% operationally while COVID-19 sales shrank.
The cash behind the dividend is the problem. Free cash flow fell from $29.9 billion in fiscal 2021 to $9.08 billion in fiscal 2025, while dividends paid rose from $8.73 billion to $9.77 billion…
…and over the twelve months to June 28, 2026, the cash dividend payout ratio was a tight 89%.
CEO Albert Bourla addressed it head-on on the Aug. 4 call: “So I want once and for all to make that clear to all that the dividend will be maintained.” The coverage supports holding the dividend, though Bourla tied any growth to the end of Pfizer’s loss-of-exclusivity period, and the company expects those patent losses to weigh on revenue through 2028. That’s the main risk. Pfizer’s answer is cost cuts: another $2.5 billion in savings it expects from 2027 through 2029. On Oct. 6, it held the dividend at $0.43 a quarter again.
Edison has room to keep raising
Where Pfizer’s dividend leans on shrinking cash flow, Edison International’s sits on growing earnings. Edison, as a regulated utility, is judged on its payout ratio of normalized EPS.
Management expects 5% to 7% annual core EPS growth from 2025 to 2030, and CEO Pedro Pizarro said on the July 30 call that Edison doesn’t “see a need for equity through that 2030 time period.”
Dividends per share rose every year from $1.98 in fiscal 2016 to $3.36 in fiscal 2025, and normalized EPS stayed well ahead of them…
…with the payout ratio between 49.6% and 64.3% every year from fiscal 2016 to fiscal 2025. It fell to a comfortable 51% in fiscal 2025 as normalized EPS jumped to $6.55 from $4.93 in fiscal 2024. That level may not repeat: management’s 2026 guidance for core EPS, its own measure, is $5.90 to $6.20.
The main risk is wildfire, and it has grown since that call. On Aug. 4, the Los Angeles County Fire Department found that arcing on an out-of-service Southern California Edison tower started the Eaton Fire. On Aug. 31, the state’s wildfire-liability bill died without a vote, and Edison’s stock fell 23% that day. Edison also carries more debt than Pfizer, with a thinner 3.08x interest coverage.
So which dividend wins?
Pfizer is the better high-yield dividend stock, though Edison’s growth makes it closer than it looks.
On paper, Edison wins the income math. $10,000 in Edison pays $650 a year now and, at its 5.4% five-year growth rate, about $1,046 in year 10. The same $10,000 in Pfizer pays $630 now and about $787 in year 10 at its 2.5% rate, and with Bourla promising to hold the dividend until the patent losses pass, even that rate may be generous.
That math assumes a decade of Edison raises with its wildfire liability unsettled. On Sept. 16, Fitch moved its outlook to negative, warning that “future rating downgrades are likely.” Edison had recorded $1.6 billion of Eaton Fire settlement losses by June 30, and it calls more material losses probable, with no estimate yet.
This isn’t to say Edison’s dividend is in danger today: its 51% payout ratio of normalized EPS leaves room. It’s just that Pfizer’s dividend, held by a CEO who has staked his credibility on it and backed by 1.97x net debt to EBITDA and 6.98x interest coverage, is the check I’d rather count on than one with an open-ended liability behind it.
Of course, if Sacramento delivers a fix, Edison’s faster raises take the lead again. Both companies’ December dividend decisions are the next test.
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!
