Pharmaceutical companies AbbVie (NYSE:ABBV) and Pfizer (NYSE:PFE) both reported fourth-quarter earnings in early February, revealing two very different pharmaceutical stories. AbbVie is riding a post-Humira reinvention, while Pfizer is still unwinding its COVID-era identity and searching for a durable growth engine. For dividend investors, the contrast is sharp.

AbbVie (ABBV) generated $17.82B in free cash flow against $11.66B in dividend payments (1.53x coverage), with Skyrizi reaching $5.01B in Q4 revenue, up 32.5% year-over-year.

Pfizer (PFE) reported $17.56B in Q4 revenue but faces dividend sustainability issues with free cash flow of $9.08B covering only 0.93x of $9.77B in dividend payments, forcing reliance on balance sheet borrowing as COVID product revenue collapsed 33% to 70%.

AbbVie’s blockbuster immunology drugs Skyrizi and Rinvoq are replacing Humira-era revenue while funding dividend growth, whereas Pfizer is racing to scale its non-COVID portfolio and execute $7.2B in cost savings by end-2027 before its unsustainable dividend erodes the balance sheet further.

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AbbVie's quarterly results showed a business that has genuinely replaced Humira. Skyrizi generated $5.01B in Q4, up 32.5% year over year, making it AbbVie's largest product. Rinvoq added $2.37B, up 29.5%. Together, those two drugs powered immunology segment revenue of $8.63B, up 18.3%.

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Pfizer's story is more complicated. The revenue came in at $17.56B, down 1.2% year over year, but beat estimates by 4.09%. The non-COVID portfolio did the real work, growing 9% operationally. Eliquis contributed $2.02B, up 10%. The Prevnar family added $1.71B, also up 10%. Vyndaqel reached $1.69B, up 7%. But COVID revenue kept shrinking: Paxlovid fell 70% to $218M, and Comirnaty dropped 33% to $2.27B.

Business Driver

AbbVie

Pfizer

Q4 Revenue

$16.62B (+10.0% YoY)

$17.56B (-1.2% YoY)

Primary Growth Engine

Skyrizi, Rinvoq (immunology)

Eliquis, Prevnar, Vyndaqel

Key Headwind

Humira biosimilar erosion (-25.9%)

COVID portfolio collapse (-33% to -70%)

Full-Year Revenue Trend

+8.57%

-1.65%

Pfizer's 6.13% dividend yield looks attractive at a glance. AbbVie yields roughly 3.31% based on its current price and annual dividend of approximately $6.92 per share. Pfizer wins on raw yield, but the sustainability picture flips the comparison.

AbbVie generated $17.82B in free cash flow in FY 2025 against $11.66B in dividend payments, a coverage ratio of 1.53x. The quarterly payout has risen every year since AbbVie's spinoff, from $0.40 per quarter in 2013 to $1.73 today, and the company raised it again in February 2026. That is a durable, well-funded income stream.

Pfizer's coverage is a genuine concern. Free cash flow in FY 2025 came in at $9.08B, while dividend payments totaled $9.77B, putting FCF coverage at 0.93x. The dividend exceeded free cash flow. In 2023, the situation was worse: FCF of $4.79B covered only 0.52x of the $9.25B dividend payout. Pfizer has maintained the payout by leaning on the 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 Action

Raised to $1.73 (Feb 2026)

Flat at $0.43 since 2025

For AbbVie, the question is whether Skyrizi and Rinvoq can sustain their growth pace long enough to fund the next pipeline wave. AbbVie guided for 2026 adjusted EPS of $14.37 to $14.57, which would cover the dividend comfortably. Watch whether the obesity entry via the Gubra partnership gains traction and whether the aesthetics segment stabilizes after a soft 2025.

For Pfizer, the cost savings program is the near-term lever. Management targets approximately $7.2B in net savings by end of 2027. The Metsera acquisition for approximately $7B adds obesity assets, but execution risk is real. Watch whether Pfizer's non-COVID portfolio can grow fast enough to offset continued COVID revenue erosion and fund the dividend without further balance sheet strain.

Pfizer's yield is higher, but a yield sustained by borrowing is not the same as one backed by free cash flow. AbbVie's dividend is growing, covered, and tied to two blockbuster drugs still in their commercial prime. For investors who prioritize income reliability over headline yield, AbbVie's track record since 2013 is hard to dismiss.

For turnaround investors willing to accept dividend risk for potential upside as Pfizer rebuilds, the valuation at a forward P/E of roughly 10x offers a different appeal. Chasing Pfizer's yield without clearer evidence that free cash flow is recovering toward sustainable coverage carries real risk.

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