This is a question that won’t go away and it keeps Frank D’Amelio, the drugmaker’s cfo, very busy. For the past few months, a growing number of analysts have openly questioned whether the payout can continue and this morning, The Wall Street Journal takes another whack at the issue.

The $8 billion in dividend payments Pfizer made to shareholders last year is, as the paper writes, widely considered to be among the few reasons many investors still hold the stock. Put another way - the stock isn’t attractive for its pipeline or patent expirations. At 6.67 percent, the yield is far superior to the pharma average of 3.37 percent and 2.18 percent for the S&P 500, the paper points out.

Pfizer’s board is keeping a close eye on the ability to maintain the dividend because “it has been a floor for the stock,” an unnamed person ‘close to the board’ tells the paper. Without that floor, some Pfizer directors worry the shares, now trading at a 10-year low of $19.18, would plunge to $10 or $12.

So far, Pfizer has continued to assure Wall Street the dividend is safe, projecting it will grow 10 percent this year. D’Amelio tells the paper Pfizer would continue the payout at least at current levels short of “significant events,” such as a major economic downturn. Hmm… We are headed in that direction, aren’t we?

As we have noted previously, to maintain the payout, some Wall Streeters speculate Pfizer may have to repatriate off-shore cash, driving up its tax rate. Remember that Lipitor contributed 65 percent of Pfizer’s free cash flow last year. This is an issue, because the dividend can only be paid from US funds.

As Credit Suisse analyst Catherine Arnold has noted more than once, repatriation rules prohibit the transfer of offshore earnings to the US without generating a tax liability. And as Lipitor patents begin to expire in 2010, cash flow starts to shrink - to less than 30 percent in 2011, for instance.

But is there a cash crunch? Pfizer suspended share buybacks in the first quarter and borrowed more money, raising short-term debt to $8.9 billion at the end of March from $5.8 billion at the end of last year, the paper writes. D’Amelio says back shares were halted because Pfizer wanted to use its money elsewhere, and the debt increase was due in part to foreign-exchange rates.

D’Amelio, however, declined to say whether Pfizer’s US cash position was low, but maintains that doesn’t matter because the drugmaker has enough total cash to pay the dividend, repatriate money or borrow.

Coming on top of the Chantix scare, though, the Journal writes that the dividend issue is adding urgency to Wall Street’s calls for ceo Jeff Kindler to do something more drastic to jump-start growth. Ideas circulating among analysts range from spinning off some businesses, such as animal health or oncology, to selling assets to become a more attractive takeover target, the paper adds.

UPDATE: In an investor note this morning, Deutsche Bank analyst Barbara Ryan writes that, “in our assessment, the issue is the earnings cost of funding the dividend, not the ability to fund the dividend - these are two dramatically different issues. In 2010, assuming Lipitor’s patent expires in March of that year, Pfizer by our calculation will generate free cash after capital expenditures of $14.7 billion, clearly covering the current $9 billion dividend liability. By this calculation, we assume Pfizer will repatriate $3 billion in cash, which it has overseas, and pay a tax on that money of 40 percent, which would be the most onerous way to plan for this.

“The cost of this repatriation would increase Pfizer’s tax rate by about 300 basis points and cost the company about 15 cents in earnings that year, reducing 2010 earnings to $2.10 to $2.24. Therefore, on a cash basis, we believe there is no issue about the ability to fund the dividend. The only issue is the earnings cost of repatriating the necessary cash to do so.”