I have a rule about high yields.
When something pays me more than twice what the market pays, I assume the market is right until I can prove otherwise. Not because the market is clever. It often isn't. But the base rate on 6%-plus yields in mega-cap equities is genuinely bad, and I would rather be slow than sorry.
Pfizer (PFE) yields roughly 6.5%.
I brought it up recently as a high-yield turnaround with attractive risk/reward, and I still think that. But I gave it a few hundred words, and a yield like that on a company walking into a patent cliff deserves a lot more than a few hundred words.
I also got a fair amount of pushback, and the pushback was consistent. Not about the science. Not about the cliff. It was about management. The word "poorly run" came up more than once, usually attached to the debt load and the acquisition record.
That is the right objection, and I'm going to spend real time on it rather than waving at it.
But first, a fact buried in the payout record that almost nobody is writing about.
So, let's dive in!
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