Move Aside, Pfizer: This Stock Is the Smarter Dividend Buy Right Now

ABBV -2.24% PFE -1.85% NVDA -2.00% Pfizer (NYSE: PFE) has one of the highest dividend yields of any pharmaceutical stock -- 6.1% at its current share price. That's more than twice the yield that AbbVie (NYSE: ABBV) offers, but in the long run, I believe AbbVie is the better dividend stock.

Pfizer has slightly outperformed AbbVie this year, with a return of over 14% compared to more than 12% for AbbVie. However, in terms of revenue growth, AbbVie has grown by more than 138% over the past decade, while Pfizer's revenue is up just over 18% over that period.

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Here are three more reasons why I prefer AbbVie as the better dividend stock.

Pfizer increased its quarterly dividend for 16 consecutive years, including a 2.3% raise last year to $0.43 per share. Its free-cash-flow (FCF) dividend payout ratio is around 89%, compared to just 65% for AbbVie.

AbbVie has an above-average dividend yield of about 2.66% at its current share price. The company has increased its quarterly dividend for 53 consecutive years, dating back to its time as a subsidiary of Abbott Laboratories. That makes AbbVie a Dividend King, a select group of stocks that have raised their dividend for 50 or more consecutive years. This year, AbbVie increased its quarterly dividend by 5.5% to $1.73.

But it's not just a stable dividend. Over the past decade, AbbVie has increased its dividend by more than 203%, compared to just 51% for Pfizer. If you count from 2013, the year that AbbVie became an independent company, it has increased its dividend by more than 330%.

AbbVie navigated the steep loss of exclusivity (LOE) on Humira by executing a precise, multi-year portfolio pivot long before biosimilars hit the U.S. market in 2023. Rather than relying on late-stage external acquisitions to patch the revenue hole, AbbVie developed two home-grown, next-generation immunology assets, Skyrizi and Rinvoq, designed specifically to capture market share across Humira's core indications in dermatology, rheumatology, and gastroenterology.

By 2025, combined annual sales for Skyrizi and Rinvoq surpassed $25 billion, effectively replacing the peak revenue lost from Humira and pushing total company revenue to record highs. Coupled with stable contributions from its neuroscience portfolio and aesthetics, AbbVie systematically bridged its immunology drop-off and returned to mid- to high-single-digit top-line growth without taking a permanent structural hit.

In the second quarter, the company reported sales of $16.9 billion, up 10.2% year over year, and earnings per share (EPS) of $2.03, an increase of 290% from the same period a year ago. Revenue growth was led by its immunology drugs, with Skyrizi bringing in $5.5 billion and Rinvoq $2.52 billion, while Humira's revenue was only $756 million.

In contrast, Pfizer will enter a multi-year LOE wave between 2026 and 2028, with roughly $17 billion to $18 billion in annual revenue exposed. Core blockbusters, including the anticoagulant Eliquis, oncology staples Ibrance and Xtandi, and key vaccine formulations, face generic entry, market erosion, and price negotiations under the Inflation Reduction Act. Pfizer's position is further complicated by the rapid normalization of its post-pandemic windfall from Comirnaty and Paxlovid.

Both companies have been aggressive in acquisitions and are willing to spend money to gain new therapies. AbbVie is in the midst of a $10.9 billion deal to acquire Apogee Therapeutics, gaining access to that company's promising atopic dermatitis therapy, zumilokibart. Its biggest recent deal before that was its $10.1 billion buyout of ImmunoGen in 2024.

Pfizer spent $7 billion in 2025 to acquire Metsera, adding late-stage weight-loss therapies to its portfolio. Pfizer's last transformational mega-deal was its $43 billion acquisition of Seagen in December 2023, which expanded its oncology portfolio with antibody-drug conjugates.

AbbVie carries more long-term debt, roughly $62 billion as of the second quarter, compared to just $32.6 billion for Pfizer. However, Pfizer's debt-to-equity level is more than 3 times that of AbbVie's, whose leverage is supported by expanding post-Humira operational cash flows from Skyrizi and Rinvoq, providing strong coverage of debt service and dividend commitments. Pfizer is paying down its obligations as its core legacy blockbusters lose market exclusivity, putting greater near-term pressure on its cash-flow conversion and credit metrics.

All in all, AbbVie is the better stock for investors to go with today.

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James Halley has positions in AbbVie and Pfizer. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, and Pfizer. The Motley Fool has a disclosure policy.