An analyst with The Motley Fool makes the case that AbbVie (NYSE: ABBV) offers a stronger dividend investment than Pfizer (NYSE: PFE), even though Pfizer carries a far larger payout. The headline for the piece reads “Move Aside, Pfizer: This Stock Is the Smarter Dividend Buy Right Now.”.
Pfizer currently offers a dividend yield of 6.1%, more than double AbbVie’s 2.66%. But James Halley, the analyst behind the report, says AbbVie’s track record, growth, and balance sheet make it the better long-term pick.
The Dividend Track Record
AbbVie has increased its quarterly dividend for 53 consecutive years, a stretch that dates back to its time as a subsidiary of Abbott Laboratories. That makes it a Dividend King, a group of stocks that have raised payouts for 50 or more years. This year, AbbVie raised its dividend by 5.5% to $1.73 per share.
Pfizer has increased its dividend for 16 straight years, including a 2.3% raise last year to $0.43 per share. But its free-cash-flow payout ratio sits around 89%, compared to 65% for AbbVie.
The divide between the two companies’ payouts has widened over the last ten years. AbbVie has raised its dividend by more than 203%, while Pfizer’s has risen just 51%. Measured from 2013, when AbbVie became an independent company, its dividend has grown more than 330%.
Surviving the Patent Cliff
The steep loss of exclusivity on Humira, AbbVie’s former blockbuster, is already behind the company. Before biosimilars entered the U.S. market in 2023, AbbVie had switched its focus to two home-grown immunology drugs: Skyrizi and Rinvoq.
By 2025, combined annual sales for Skyrizi and Rinvoq surpassed $25 billion, replacing the revenue lost from Humira. In the second quarter, AbbVie reported sales of $16.9 billion, up 10.2% year over year, and earnings per share of $2.03, up 290%. Skyrizi brought in $5.5 billion and Rinvoq $2.52 billion, while Humira’s revenue was only $756 million.
Between 2026 and 2028, Pfizer is facing a long stretch where its patents expire one after another, leaving it with roughly $17 billion to $18 billion in annual revenue at risk. The company’s main products, including Eliquis, Ibrance, and Xtandi, will all be hit by generic competition and price pressure under the Inflation Reduction Act. On top of that, the profits from Comirnaty and Paxlovid, which carried the company through the pandemic, have now settled back to ordinary levels.
The Debt Picture
AbbVie carries more long-term debt, roughly $62 billion as of the second quarter, versus $32.6 billion for Pfizer.
AbbVie’s financial position rests on the earnings generated by Skyrizi and Rinvoq, which fund both its interest payments and dividend distributions. In contrast, Pfizer’s debt-to-equity level is more than three times AbbVie’ is reducing its own debt through cash flow from sales of drugs that have lost their exclusivity, a process that is straining its ability to convert cash into profits.
Both companies have been active dealmakers. AbbVie is in the midst of a $10.9 billion deal to acquire Apogee Therapeutics. Its biggest recent deal was the $10.1 billion buyout of ImmunoGen in 2024. Pfizer spent $7 billion in 2025 on Metsera and closed its $43 billion acquisition of Seagen in December 2023.
Why AbbVie Wins on Three Counts
Halley lists three reasons AbbVie beats Pfizer as a dividend stock:
- Dividend consistency: AbbVie has raised payouts for 53 straight years versus 16 for Pfizer.
- Patent cliff readiness: AbbVie already replaced Humira’s revenue with Skyrizi and Rinvoq, while Pfizer faces a wave of expirations from 2026 to 2028.
- Debt leverage: Pfizer’s debt-to-equity is more than three times AbbVie’s, despite AbbVie carrying more total long-term debt.
AbbVie and Pfizer both hold stock from Halley, and both companies are owned by The Motley Fool as well — the Fool recommends them both and also owns shares of Abbott Laboratories.
The report notes that AbbVie was not among the 10 stocks on the Motley Fool Stock Advisor’s latest top list. The analyst team there has a track record of beating the S&P 500 by nearly 5x, with past picks including Netflix and Nvidia.
Pfizer has slightly outperformed AbbVie this year, with a return of over 14% compared to more than 12%. But over the past decade, AbbVie’s revenue has grown more than 138%, while Pfizer’s is up just over 18%.
In sum, Halley states that AbbVie is presently the superior stock for investors to own.
Source: finance.yahoo.com
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