Tom Reese/Paul

Rubillo, Dividend.com

Pfizer (PFE) shares are down nearly 10% in

early trading, after confirming it would acquire drugmaker Wyeth (WYE)

for $68 billion.

Pfizer will pay $50.19 or $33 in cash and 0.985 share of

its stock for each Wyeth share. Pfizer announced it would cut 15 percent of the

combined company's workforce of about 130,000 employees and close some

manufacturing sites.

In addition, the company is cutting its quarterly dividend

payout in half, to 16 cents from 32 cents.

The Bottom Line

We had removed the shares of PFE from our “Recommended” list on Nov.12, when

the stock was trading at $16.77. The company will now have a 3.67% dividend

yield, based on Friday’s closing stock price of $17.45. We said it on Friday

when the rumors started to fly that the deal would also be a way for the

company to work its dividend lower as well, with the acquisition likely to be a

combination of stock and cash. This morning we are hearing that as well as the

layoff scenario we also cited would take place. Tough day for some of the

employees of this merger deal as well as Pfizer shareholders being hit with a

dividend cut.

Pfizer (PFE) is not recommended at this

time, holding a Dividend.com Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well

as a detailed explanation of our ratings

system here.