Pfizer (PFE) Raise

[Kerim]

With the announced dividend raise to 32 cents per quarter, PFE's dividend is finally / officially back to the level it was when I bought the shares in 2008 -- $1.28 per year. That dividend cut bummed me out, but I figured it would recover, eventually. I paid $16.22 per share, which gave me an initial yield of 7.89 percent. With the latest raise, my yield on cost is back to that level -- 7.89 percent. Did it make sense to hold? I don't know. I may have done better in an index fund. My initial outlay in 2008 was $3264 for 200 shares. With reinvestment, I've now got about 240 shares worth about $7782.

More concerning however, is that PFE's earnings trajectory looks poor, and with this raise, the payout ratio is comfortably above 100 percent. If they can't turn things around, we may be looking at another dividend cut before too long.

Other thoughts?

[ChadR]

This at least shows you have to love the power of reinvested dividends. 40 more shares is nice.

While I don't own any PFE, here are my thoughts. Currently I feel it is overvalued though not significantly. I wouldn't buy any today. And like you said, a dividend cut is possible with the payout ratio as high as it is. If I was in your position, I would probably just sit on PFE and keep reinvesting the dividend. My past history is when I sold an investment that I thought was overvalued, I ended up worse than what I would have been if I just stayed put.

[DividendDragon]

I took a look at PFE recently and decided that the payout ratio was just too high.
Ofcourse, there's promise of earnings growth from their pipeline but it's just that - a promise of growth.

For me, too risky - especially at these prices.