Pfizer Inc. (NYSE:PFE) and Abbott Laboratories (NYSE:ABT) offer investors two very different dividend stories. Pfizer (NYSE:PFE) is working to rebuild growth before major patent expirations arrive, while Abbott (NYSE:ABT) is combining a long dividend-growth record with a more diversified healthcare portfolio. Pfizer (NYSE:PFE) may offer turnaround potential, but Abbott’s (NYSE:ABT) latest results present the steadier investment case.
Bull Case
Pfizer’s (NYSE:PFE) non-COVID portfolio is beginning to carry more of the business. Revenue excluding Comirnaty and Paxlovid grew 5% operationally in fiscal Q2 2026, while launched and acquired products generated $3.2 billion and increased 18% operationally. Padcev revenue rose 23% operationally to $667 million, supported by increased market share in first-line locally advanced or metastatic urothelial cancer and uptake in muscle-invasive bladder cancer. The Vyndaqel family generated $1.76 billion, up 8% operationally, while Lorbrena grew 37% operationally. This broader contribution is encouraging because Pfizer needs several products to offset declining COVID revenue and future patent losses.
Stronger non-COVID performance allowed Pfizer (NYSE:PFE) to raise the midpoint of its 2026 revenue guidance by $500 million, despite reducing its COVID-product forecast from approximately $5 billion to $4 billion. Its cost programs should provide further support, as management expects combined savings of approximately $9.7 billion through 2029 across its cost-realignment and manufacturing-optimization initiatives.
Abbott’s (NYSE:ABT) advantage is the breadth of its growth. Second-quarter sales increased 13% on a reported basis and 4.8% on a comparable basis, while adjusted EPS rose 4% to $1.31. Medical Devices remained Abbott’s (NYSE:ABT) largest segment and an important growth contributor, with sales rising 8.4% on a comparable basis. Growth was led by electrophysiology, rhythm management, heart failure, and diabetes care, with continuous-glucose-monitor sales increasing 9.5% comparably.
The Exact Sciences acquisition also expanded Abbott’s (NYSE:ABT) diagnostics business. Diagnostics revenue reached $3.09 billion, rising 42.3% reported and 2.9% comparably. Within the segment, Cancer Diagnostics delivered 13.3% comparable growth as Cologuard benefited from increasing numbers of new and repeat users.
Bear Case
It might be significant for investors to keep in mind that Pfizer’s (NYSE:PFE) recovery has not yet produced strong companywide growth. Total revenue increased 3% to $15.03 billion, but operational growth was only 1%. It also recorded a $248 million GAAP net loss after recognizing $4.3 billion in non-cash intangible-asset impairments. Patent exposure remains the larger concern for the company. Pfizer’s (NYSE:PFE) guidance incorporates an estimated $1.1 billion revenue headwind from recent and expected generic and biosimilar competition in 2026. Newer products are growing, but they have not yet demonstrated that they can fully replace the combined revenue exposed to future losses of exclusivity.
Abbott’s (NYSE:ABT) quarter was not uniformly strong. Nutrition sales declined 3.6% on a comparable basis, while Rapid and Molecular Diagnostics fell 8%. Moreover, Abbott (NYSE:ABT) maintained its full-year comparable-sales-growth outlook of 6.5%–7.5%, meaning growth must accelerate from the second quarter’s 4.8% rate. The Exact Sciences acquisition also contributed to higher amortization and acquisition-related expenses.
Dividend Comparison
Pfizer’s (NYSE:PFE) quarterly dividend is $0.43 per share, equivalent to $1.72 annually. The September 2026 payment will be its 351st consecutive quarterly dividend, and management says it remains committed to maintaining the payout and growing it over time. Abbott (NYSE:ABT), on the other hand, pays $0.63 quarterly, or $2.52 annually. The company has a documented record of 54 consecutive years of dividend increases.
Based on adjusted 2026 EPS guidance, Pfizer’s (NYSE:PFE) annualized dividend represents approximately 57%–61% of projected earnings, compared with roughly 45%–46% for Abbott. Although this is not a cash-flow payout ratio, it suggests Abbott (NYSE:ABT) has greater earnings coverage and more room to continue raising its dividend.
Conclusion
Pfizer (NYSE:PFE) offers greater turnaround potential, but its limited operational growth and approaching patent losses increase the risk surrounding that recovery. Meanwhile, Abbott (NYSE:ABT) combines stronger diversification, healthier dividend coverage, and a far longer record of annual increases. On balance, Abbott (NYSE:ABT) currently offers the better risk-reward for dividend-focused healthcare investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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