pharmaceutical companies AbbVie (NYSE:ABBV | abbv price prediction) And Pfizer (NYSE:PFE) both reported fourth-quarter earnings in early February, revealing two distinct pharmaceutical stories. AbbVie is riding the reins post-Humira, while Pfizer is still unpacking its COVID-era identity and searching for a sustainable growth engine. For dividend investors, the contrast is stark.
Skyrizi Carys AbbVie. Pfizer’s non-Covid portfolio bears the weight.
AbbVie’s quarterly results Showed a business that has actually replaced Humira. Skyrizi earned $5.01B in Q4, up 32.5% year over year, making it AbbVie’s biggest product. Rinvoq added $2.37B, up 29.5%. Together, those two drugs boosted immunology segment revenue by 18.3% to $8.63B.
Pfizer’s story is more complicated. Revenue came in at $17.56BA decline of 1.2% year over year, but better than estimates by 4.09%. The non-Covid portfolio did the real work, growing 9% operationally. Elicis contributed 10% more, $2.02B. The Prevnar family added $1.71B, also up 10%. Vindacell rose 7% to $1.69B. But COVID revenues continued to shrink: Paxlovid fell 70% to $218M, and Comirnaty fell 33% to $2.27B.
| business driver | AbbVie | Pfizer |
|---|---|---|
| Q4 revenue | $16.62B (+10.0% YoY) | $17.56B (-1.2% YoY) |
| primary development engine | Skirizi, Rinvoq (Immunology) | Eliquis, Prevnar, Vindacel |
| key headwind | Humira biosimilar degradation (-25.9%) | Covid Portfolio Collapse (-33% to -70%) |
| Full Year Revenue Trend | +8.57% | -1.65% |
The dividend case looks very different for everyone
Pfizer’s 6.13% dividend yield looks attractive at a glance. Based on AbbVie’s current price and annual dividend of approximately $6.92 per share, that yields approximately 3.31%. Pfizer wins on raw yield, but the sustainability picture is stark in comparison.
AbbVie generated $17.82B in free cash flow in FY2025 against $11.66B in dividend payments, giving a coverage ratio of 1.53x. AbbVie’s quarterly payout has increased every year since the spinoff, from $0.40 per quarter in 2013 to $1.73 today, and the company has raised it again through February 2026. It is a sustainable, well-funded income stream.
Pfizer’s coverage is a real concern. Free cash flow in FY2025 was $9.08B, while dividend payments totaled $9.77B, giving FCF coverage of 0.93x. Dividends exceeded free cash flow. In 2023, the situation was worse: FCF of $4.79B covered only 0.52x of the $9.25B dividend payment. Pfizer has maintained payouts by relying on its balance sheet rather than operating cash flow.
| dividend metric | AbbVie | Pfizer |
|---|---|---|
| Annual Dividend/Share | ~$6.92 | $1.72 |
| Dividend Yield (Current) | ~3.31% | 6.13% |
| FY 2025 FCF Coverage | 1.53x | 0.93x |
| Recent Dividend Actions | Raised to $1.73 (February 2026) | Fixed at $0.43 by 2025 |
What to look forward to in the rest of 2026
For AbbVie, the question is whether Skyrizi and Rinvoq can sustain their growth momentum long enough to finance the next pipeline wave. AbbVie guides adjusted EPS of $14.37 to $14.57 for 2026, which will comfortably cover the dividend. See if entry into obesity through Gubra partnership picks up pace and if the aesthetics segment stabilizes after a soft 2025.
For Pfizer, Cost savings programs are near-term leverage. Management is targeting approximately $7.2B in net savings by the end of 2027. Metserra acquisition for nearly $7B includes overweight assets, but execution risk is real. See if Pfizer’s non-COVID portfolio can grow fast enough to offset continued COVID revenue erosion and fund the dividend without further balance sheet stress.
Why does AbbVie have the edge in dividend reliability?
Pfizer’s yield is high, but the yield from borrowing is not the same as the yield backed by free cash flow. AbbVie’s dividend is growing, is covered, and is tied to two blockbuster drugs that are still at their commercial peak. For investors who prioritize earnings reliability over headline yields, AbbVie’s track record since 2013 is hard to dismiss.
For turnaround investors willing to accept dividend risk for the potential upside due to Pfizer’s restructuring, the valuation at a Forward P/E of around 10x offers a distinct appeal. Chasing Pfizer’s yield without clear evidence that free cash flow is recovering toward sustainable coverage carries real risks.