Bristol Myers Squibb Stock Appears Attractive
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- Valuation Appeal: Bristol Myers Squibb's price-to-earnings ratio stands at approximately 16x, significantly lower than the S&P 500's 27x and the pharmaceutical industry's 24x average, indicating potential value for investors.
- Dividend Yield Advantage: The company's dividend yield of 4.4% is notably higher than the S&P 500's 1.1% and the average drug maker's 1.7%, making it attractive for income-seeking investors.
- Patent Expiration Risks: However, Bristol Myers Squibb faces significant risks from upcoming patent expirations, particularly with key cancer drugs Revlimid and Pomalyst in 2026, and cardiovascular drug Eliquis facing competition in 2028, which could pressure future revenues.
- Long-Term Investment Commitment: Despite short-term uncertainties, Bristol Myers Squibb's proven ability to survive in the pharmaceutical industry and its long-term commitment make it appealing for investors looking to hold for decades, especially given its current valuation metrics.
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Analyst Views on BMY
Wall Street analysts forecast BMY stock price to rise
20 Analyst Rating
8 Buy
11 Hold
1 Sell
Moderate Buy
Current: 54.720
Low
37.00
Averages
55.86
High
68.00
Current: 54.720
Low
37.00
Averages
55.86
High
68.00
About BMY
Bristol-Myers Squibb Company is a global biopharmaceutical company. It is engaged in the discovery, development, and delivery of transformational medicines for patients facing serious diseases in areas: oncology, hematology, immunology, cardiovascular, neuroscience and other areas. Its growth portfolio includes Opdivo (nivolumab), Opdivo Qvantig (nivolumab and hyaluronidase-nvhy), Orencia (abatacept), Yervoy (ipilimumab), Reblozyl (luspatercept-aamt), Breyanzi (lisocabtagene maraleucel), Opdualag (nivolumab and relatlimab-rmbw), Camzyos (mavacamten), Zeposia (ozanimod), Abecma (idecabtagene vicleucel), Sotyktu (deucravacitinib), Krazati (adagrasib), and Cobenfy (xanomeline and trospium chloride). Its other growth products include Augtyro, Onureg, Inrebic, Nulojix, and Empliciti. Its legacy portfolio includes Eliquis (apixaban), Revlimid (lenalidomide), Pomalyst/Imnovid (pomalidomide), Sprycel (dasatinib), and Abraxane (paclitaxel albumin-bound particles for injectable suspension).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Bristol Myers Squibb Stock Appears Undervalued
- Valuation Appeal: Bristol Myers Squibb's price-to-earnings ratio stands at approximately 16x, significantly lower than the S&P 500's 27x and the pharmaceutical industry's 24x, indicating its stock may attract value investors in the current market environment.
- Dividend Yield Advantage: The company boasts a dividend yield of 4.4%, well above the S&P 500's 1.1% and the average pharmaceutical yield of 1.7%, making it particularly appealing to income-seeking investors, despite a relatively high payout ratio of 70%.
- Patent Expiration Risks: Bristol Myers Squibb faces patent expiration risks that could pressure its future performance, particularly with the patents for cancer drugs Revlimid and Pomalyst expiring in 2026, and cardiovascular drug Eliquis facing competition in 2028, potentially impacting revenue and profits in the near term.
- Long-Term Investment Potential: Despite short-term uncertainties, Bristol Myers Squibb's proven survival in the pharmaceutical industry and attractive valuation metrics still make it appealing for long-term investors, especially those willing to hold for decades.
See More
Pfizer vs. Bristol Myers Squibb Dividend Comparison
- Dividend Yield Comparison: Pfizer boasts a forward dividend yield of 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet concerns about Pfizer's dividend sustainability arise due to its high payout ratio of over 60%, which may hinder long-term growth.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 4.4%, indicating that Bristol Myers Squibb offers greater stability and sustainability in dividend growth.
- Short-term Growth Forecasts: Analysts predict a 1.4% decline in Pfizer's sales for 2023, while Bristol Myers Squibb is expected to see a 1.8% drop, suggesting that despite similar short-term earnings forecasts, Bristol Myers Squibb's dividend growth performance stands out.
- Investor Sentiment: Since January, total returns for Pfizer and Bristol Myers Squibb have been 6.1% and 3.2%, respectively; although both stocks trade at low valuations, investors remain cautious, making Bristol Myers Squibb a potentially stronger investment choice due to its advantages in dividend growth and durability.
See More
Bristol Myers Squibb vs. Pfizer: Dividend Comparison
- Yield Comparison: Pfizer's current dividend yield stands at 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet market concerns regarding Pfizer's dividend sustainability could impact its long-term investment appeal.
- Payout Ratio Analysis: Bristol Myers Squibb maintains a payout ratio of approximately 40%, which is within a healthy range, while Pfizer's exceeds 60%, nearing unsustainable levels, potentially affecting its future capital expenditures and growth prospects.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 16 years and 4.4%, highlighting Bristol's advantage in dividend growth, which may attract long-term investors.
- Market Performance and Outlook: Since January, total returns for Bristol Myers Squibb and Pfizer have been 3.2% and 6.1%, respectively, both facing similar market challenges; despite Pfizer's short-term sales forecast decline, their low valuations may present future growth opportunities.
See More
Bristol Myers Squibb vs. Pfizer: Dividend Comparison
- Yield Comparison: Pfizer currently boasts a forward dividend yield of 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet this elevated yield raises market concerns regarding Pfizer's dividend sustainability, potentially impacting its long-term investment appeal.
- Payout Ratio Analysis: With a payout ratio around 40%, Bristol Myers Squibb remains within a healthy range, while Pfizer's exceeds 60%, nearing unsustainable levels, indicating that Pfizer may face liquidity pressures in the future, affecting its ability to repay debt and invest in growth.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 16 years and 4.4% growth, suggesting that Bristol Myers Squibb holds stronger potential for dividend growth, appealing to long-term income-focused investors.
- Market Performance and Outlook: Since January, total returns for Bristol Myers Squibb and Pfizer stand at 3.2% and 6.1%, respectively, with both trading at under 9 times forward earnings; despite facing similar market challenges, Bristol Myers Squibb excels in dividend growth and durability, making it a potentially stronger investment choice.
See More
Arcus Biosciences Partners with Bristol Myers Squibb for Clinical Trial
- Clinical Trial Collaboration: Arcus Biosciences has entered into a clinical trial collaboration with Bristol Myers Squibb, supplying its investigational small-molecule HIF-2a inhibitor casdatifan for evaluation in the BMS-sponsored ROSETTA RCC-208 clinical trial, aimed at assessing its efficacy in advanced renal cell carcinoma.
- New Treatment Arms: The collaboration will add casdatifan combinations as two new arms of the ROSETTA RCC-208 trial, aiming to provide patients with treatment options based on HIF-2a inhibitors, thereby enhancing the effectiveness of existing therapies.
- Development Rights Retained: Under the agreement, both Arcus and Bristol Myers Squibb will retain development and commercial rights to their respective assets, ensuring independence while advancing their research agendas through this partnership.
- Strategic Development Plan: This collaboration is part of Arcus's holistic development strategy, designed to offer physicians and patients multiple treatment options, including first-line and second-line therapies, to address the treatment needs of advanced renal cell carcinoma.
See More
Dividend Outlook for Bristol Myers Squibb and Pfizer Amid Patent Challenges
- Dividend Yield Comparison: Bristol Myers Squibb boasts a forward yield of 4.4%, while Pfizer offers a higher yield of 6.6%, indicating both companies' commitment to maintaining dividends despite facing patent cliff challenges.
- Patent Risk Mitigation: Bristol Myers is set to lose exclusivity for Opdivo and Eliquis by the end of the decade, yet its new subcutaneous formulation of Opdivo is expected to attract older patients, helping to mitigate biosimilar competition pressures.
- New Drug Development Progress: Bristol Myers is developing the next-generation anticoagulant milvexian, aimed at addressing bleeding risks associated with traditional blood thinners, while its robust pipeline in oncology and immunology supports future growth prospects.
- Pfizer's Product Performance: Pfizer also faces patent expiration risks, including for its cancer drug Ibrance, but its new product Abrysvo is performing well, and the company plans to launch about 20 pivotal studies by 2025, which could drive share price recovery if successful.
See More
Bristol Myers Squibb Stock Appears Undervalued
- Valuation Appeal: Bristol Myers Squibb's price-to-earnings ratio stands at approximately 16x, significantly lower than the S&P 500's 27x and the pharmaceutical industry's 24x, indicating its stock may attract value investors in the current market environment.
- Dividend Yield Advantage: The company boasts a dividend yield of 4.4%, well above the S&P 500's 1.1% and the average pharmaceutical yield of 1.7%, making it particularly appealing to income-seeking investors, despite a relatively high payout ratio of 70%.
- Patent Expiration Risks: Bristol Myers Squibb faces patent expiration risks that could pressure its future performance, particularly with the patents for cancer drugs Revlimid and Pomalyst expiring in 2026, and cardiovascular drug Eliquis facing competition in 2028, potentially impacting revenue and profits in the near term.
- Long-Term Investment Potential: Despite short-term uncertainties, Bristol Myers Squibb's proven survival in the pharmaceutical industry and attractive valuation metrics still make it appealing for long-term investors, especially those willing to hold for decades.
See More
Pfizer vs. Bristol Myers Squibb Dividend Comparison
- Dividend Yield Comparison: Pfizer boasts a forward dividend yield of 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet concerns about Pfizer's dividend sustainability arise due to its high payout ratio of over 60%, which may hinder long-term growth.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 4.4%, indicating that Bristol Myers Squibb offers greater stability and sustainability in dividend growth.
- Short-term Growth Forecasts: Analysts predict a 1.4% decline in Pfizer's sales for 2023, while Bristol Myers Squibb is expected to see a 1.8% drop, suggesting that despite similar short-term earnings forecasts, Bristol Myers Squibb's dividend growth performance stands out.
- Investor Sentiment: Since January, total returns for Pfizer and Bristol Myers Squibb have been 6.1% and 3.2%, respectively; although both stocks trade at low valuations, investors remain cautious, making Bristol Myers Squibb a potentially stronger investment choice due to its advantages in dividend growth and durability.
See More
Bristol Myers Squibb vs. Pfizer: Dividend Comparison
- Yield Comparison: Pfizer's current dividend yield stands at 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet market concerns regarding Pfizer's dividend sustainability could impact its long-term investment appeal.
- Payout Ratio Analysis: Bristol Myers Squibb maintains a payout ratio of approximately 40%, which is within a healthy range, while Pfizer's exceeds 60%, nearing unsustainable levels, potentially affecting its future capital expenditures and growth prospects.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 16 years and 4.4%, highlighting Bristol's advantage in dividend growth, which may attract long-term investors.
- Market Performance and Outlook: Since January, total returns for Bristol Myers Squibb and Pfizer have been 3.2% and 6.1%, respectively, both facing similar market challenges; despite Pfizer's short-term sales forecast decline, their low valuations may present future growth opportunities.
See More
Bristol Myers Squibb vs. Pfizer: Dividend Comparison
- Yield Comparison: Pfizer currently boasts a forward dividend yield of 6.7%, significantly higher than Bristol Myers Squibb's 4.6%, yet this elevated yield raises market concerns regarding Pfizer's dividend sustainability, potentially impacting its long-term investment appeal.
- Payout Ratio Analysis: With a payout ratio around 40%, Bristol Myers Squibb remains within a healthy range, while Pfizer's exceeds 60%, nearing unsustainable levels, indicating that Pfizer may face liquidity pressures in the future, affecting its ability to repay debt and invest in growth.
- Dividend Growth Potential: Bristol Myers Squibb has increased its dividend for 18 consecutive years with an average growth rate of 5.3%, compared to Pfizer's 16 years and 4.4% growth, suggesting that Bristol Myers Squibb holds stronger potential for dividend growth, appealing to long-term income-focused investors.
- Market Performance and Outlook: Since January, total returns for Bristol Myers Squibb and Pfizer stand at 3.2% and 6.1%, respectively, with both trading at under 9 times forward earnings; despite facing similar market challenges, Bristol Myers Squibb excels in dividend growth and durability, making it a potentially stronger investment choice.
See More
Arcus Biosciences Partners with Bristol Myers Squibb for Clinical Trial
- Clinical Trial Collaboration: Arcus Biosciences has entered into a clinical trial collaboration with Bristol Myers Squibb, supplying its investigational small-molecule HIF-2a inhibitor casdatifan for evaluation in the BMS-sponsored ROSETTA RCC-208 clinical trial, aimed at assessing its efficacy in advanced renal cell carcinoma.
- New Treatment Arms: The collaboration will add casdatifan combinations as two new arms of the ROSETTA RCC-208 trial, aiming to provide patients with treatment options based on HIF-2a inhibitors, thereby enhancing the effectiveness of existing therapies.
- Development Rights Retained: Under the agreement, both Arcus and Bristol Myers Squibb will retain development and commercial rights to their respective assets, ensuring independence while advancing their research agendas through this partnership.
- Strategic Development Plan: This collaboration is part of Arcus's holistic development strategy, designed to offer physicians and patients multiple treatment options, including first-line and second-line therapies, to address the treatment needs of advanced renal cell carcinoma.
See More
Dividend Outlook for Bristol Myers Squibb and Pfizer Amid Patent Challenges
- Dividend Yield Comparison: Bristol Myers Squibb boasts a forward yield of 4.4%, while Pfizer offers a higher yield of 6.6%, indicating both companies' commitment to maintaining dividends despite facing patent cliff challenges.
- Patent Risk Mitigation: Bristol Myers is set to lose exclusivity for Opdivo and Eliquis by the end of the decade, yet its new subcutaneous formulation of Opdivo is expected to attract older patients, helping to mitigate biosimilar competition pressures.
- New Drug Development Progress: Bristol Myers is developing the next-generation anticoagulant milvexian, aimed at addressing bleeding risks associated with traditional blood thinners, while its robust pipeline in oncology and immunology supports future growth prospects.
- Pfizer's Product Performance: Pfizer also faces patent expiration risks, including for its cancer drug Ibrance, but its new product Abrysvo is performing well, and the company plans to launch about 20 pivotal studies by 2025, which could drive share price recovery if successful.
See More
