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Pfizer’s Dividends and Earnings Quality

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Pfizer

In this part, we’ll discuss Pfizer’s (PFE) earnings quality and dividend performance.

The above chart compares the changes in Pfizer’s Earnings Quality score since the first quarter of 2017.

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Pfizer’s dividend performance

Pfizer has announced the following dividends during 2018.

  • The first-quarter interim dividend of $0.34 was announced on December 18, 2017, and was paid on March 1.
  • The second-quarter interim dividend of $0.34 was announced on April 26 and was paid on June 1.
  • The third-quarter interim dividend of $0.34 was announced on June 28 and was paid on September 4.
  • The fourth-quarter final dividend of $0.34 was announced on September 27 and will be paid on December 3.

Pfizer’s dividend yield is 3.15%. The company’s historical dividend yield was 3.53% in 2017, while the five-year average yield is 3.44%.

Earnings quality

The EQ (earnings quality) score is a measure that predicts the company’s future earnings based on the reported earnings. The EQ score is measured on a scale of 100, where 100 is considered to be the best. The components for the EQ score include accruals, cash flows, operating efficiency, and exclusions.

For Pfizer, the EQ score is 84, while the industry median EQ score is 32. Pfizer’s EQ score is much higher than the median industry score, which signifies higher earnings quality compared to its peers.

The score for accruals is 78, the score for cash flows is 87, the score for operating efficiency is 80, and the score for exclusions is 24.

Pfizer’s EQ score increased from 82 to 84 based on the company’s second-quarter earnings. The ratio for the asset to liability accruals decreased to zero from 1.3 during the last quarter.

Notably, the iShares US Pharmaceuticals ETF (IHE) holds 9.4% in Pfizer (PFE), 10.5% in Johnson & Johnson (JNJ), 6.8% in Eli Lilly (LLY), and 6.2% in Bristol-Myers Squibb (BMY).

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