My Top Dividend-Paying, Deep-Value Stock to Buy in August 2025

Dividend Gold Rush: The Undervalued Cash Machine Wall Street Overlooked

Deep-Value Hunting Grounds

Forget the hype stocks—this hidden gem pumps out cash while trading at basement-level multiples. The numbers don't lie: double-digit dividend yields coupled with price-to-earnings ratios that scream undervalued.

August's Contrarian Play

While momentum traders chase overpriced tech, smart money loads up on this cash-generating powerhouse. It's the ultimate 'buy when there's blood in the streets' move—except the streets are paved with dividend checks.

The institutional crowd keeps sleeping on cash-flow monsters like this—probably too busy analyzing their nth derivative of stochastic volatility models to notice actual money hitting bank accounts.

Image source: Getty Images.

Pfizer's juicy dividend

Pfizer's forward dividend yield currently stands at 6.86%. This yield is so attractive that I wondered if it's the highest of any healthcare stock. It is (or was recently, anyway). As of Aug. 19, 2025, Pfizer's forward dividend yield was the juiciest in the healthcare sector.

The big drugmaker's dividend track record is impressive, too. Pfizer has paid 347 consecutive quarterly dividends. The company has increased its dividend for 16 consecutive years.

Can Pfizer keep the dividends flowing and growing? I think it can. So does the company's management team. CFO David Denton reiterated in Pfizer's second-quarter earnings call that the dividend program remains first on the drugmaker's capital allocation priorities, stating, "Our strategy consists of maintaining and growing our dividend over time."

Sure, Pfizer's dividend payout ratio of around 90% is higher than I'd like. However, the pharmaceutical company's earnings continue to grow. Pfizer even recently raised its full-year earnings guidance. It's also on track to cut costs by around $7.2 billion by the end of 2027, which will further improve the bottom line and the payout ratio.

A tremendous value

Let's shift gears to discuss Pfizer's tremendous value. The stock's forward price-to-earnings (P/E) ratio is only 8.3. That's a fraction of the's forward earnings multiple of 22.8. It's also well below the S&P 500 healthcare sector's average forward P/E of 16.5.

One question comes to mind, though: Is Pfizer a value trap? After all, the drugmaker faces a patent cliff with several of its top-selling products losing patent exclusivity over the next few years. The list includes blood thinner Eliquis, which generated nearly $7.6 billion for Pfizer last year, and breast cancer drug Ibrance, which raked in almost $4.4 billion in sales.

I think Pfizer is in a better position than meets the eye to navigate its patent cliff. The company has several new products with strong growth prospects, notably including migraine drug Nurtec ODT, RSV vaccine Abrysvo, and multiple myeloma drug Elrexfio. Pfizer's pipeline also features 108 candidates, with 28 late-stage programs and four awaiting regulatory approvals.

Wall Street seems to agree that Pfizer isn't a value trap. The consensus 12-month price target reflects an upside potential of over 13%. Pfizer's price-to-earnings-to-growth (PEG) ratio, which is based on five-year earnings growth projections of analysts surveyed by, is a low 0.86. This PEG ratio suggests that analysts aren't overly concerned about Pfizer's growth prospects, even with multiple drugs losing exclusivity.

Some risks

Pfizer does face some risks. Although I believe it will weather the patent cliff relatively well, the losses of exclusivity make the company more dependent on the success of its new drugs and pipeline programs. Sometimes, new drugs don't perform as well as expected. Pipeline candidates can also sometimes flop in clinical trials.

President Trump's threatened pharmaceutical tariffs could negatively impact Pfizer. So could his administration's push to implement "most-favored-nation" drug pricing, which aims to tie U.S. drug prices to the lowest prices paid by other developed nations.

Again, though, I think Pfizer will survive and thrive -- just as it has for 176 years. For investors seeking high dividend yields and DEEP value, I view Pfizer as the best pick on the market right now.