Updated 3/6/25
Bristol-Myers Squibb (BMY) has been a dominant force in the pharmaceutical industry for decades, leading the way in treatments for oncology, cardiovascular disease, and immunology. For income-focused investors, this company has been a reliable dividend payer, offering both consistency and growth over the years.
Lately, the stock has had its ups and downs, but that’s nothing unusual in the pharmaceutical space. Investors looking for a mix of stability, income, and long-term potential will find plenty to consider here. Let’s break down the most important aspects for dividend investors.
Key Dividend Metrics
📈 Forward Annual Dividend Rate: $2.48
💰 Forward Dividend Yield: 4.15%
📊 5-Year Average Dividend Yield: 3.50%
⚖️ Payout Ratio: 59.84%
📆 Next Ex-Dividend Date: April 4, 2025
🏛 Dividend Growth Streak: 15+ years
Dividend Overview
At a yield of 4.15%, Bristol-Myers Squibb is offering a strong income stream, especially when compared to the broader market. It’s also well above its five-year average of 3.50%, which makes it appealing to investors looking for a solid return in today’s uncertain market.
The company has a payout ratio of just under 60%, meaning dividends are well-covered by earnings while still allowing room for future increases. With a long history of annual dividend hikes, shareholders can feel confident about BMY’s commitment to rewarding investors over the long term.
For those planning to capture the next dividend payout, be sure to own shares before the April 4, 2025, ex-dividend date.
Dividend Growth and Safety
Bristol-Myers Squibb has consistently increased its dividend, making it a strong choice for those seeking growing income over time. Over the last five years, dividend growth has averaged between 6% and 7% annually. While that’s not the highest growth rate out there, it’s steady, which is exactly what many dividend investors look for.
The current payout ratio of 59.84% strikes a good balance—high enough to provide attractive income but low enough to allow for reinvestment and growth. One of the biggest factors supporting the dividend’s safety is the company’s strong cash flow, with over $15 billion in operating cash flow and nearly $17 billion in levered free cash flow.
However, BMY’s high debt level is something to keep an eye on. With total debt exceeding $51 billion and a debt-to-equity ratio above 300%, the company is highly leveraged. While its cash flow is more than sufficient to cover dividend payments, investors should be mindful of how this debt load could impact future financial flexibility.
Chart Analysis
Price Action
Bristol-Myers Squibb (BMY) has been on a solid upward trajectory since bottoming out last year. The stock made a notable recovery, pushing above both its 50-day and 200-day moving averages, signaling a shift in momentum. The latest closing price of $60.01 is near its recent highs, suggesting strong demand at these levels.
The price action shows that after a long period of weakness, the stock has been climbing steadily, finding support on the 50-day moving average multiple times. There was a brief pullback in recent months, but buyers stepped in quickly, preventing any major downside.
Moving Averages
The 50-day moving average (orange line) has been trending above the 200-day moving average (blue line) for several months now. This crossover, which occurred in late summer, is a classic bullish signal that often marks the beginning of a longer-term uptrend.
More recently, the stock briefly dipped toward the 50-day moving average but bounced back quickly. This kind of price action suggests that investors are using short-term pullbacks as buying opportunities. The 200-day moving average is also starting to turn upward, which reinforces the idea that the longer-term trend is improving.
Volume Trends
Trading volume has remained steady, with occasional spikes that coincide with strong upward moves in the stock. These volume surges often indicate institutional buying, which is a positive sign for the stock’s long-term strength.
A closer look at the volume bars shows that recent rallies have been supported by higher-than-average volume, while pullbacks have occurred on lighter volume. This pattern suggests that selling pressure is not overwhelming and that buyers are still in control.
Relative Strength Index (RSI)
The RSI indicator is hovering just below the overbought zone. This means the stock has been showing strength but hasn’t yet reached extreme levels where a pullback would be inevitable. Earlier in the year, the RSI hit an overbought reading, which led to a brief cooldown in price, but it never dipped into oversold territory.
Right now, the RSI is in a comfortable range that supports further upside, though a brief consolidation period wouldn’t be surprising. If the RSI pushes too far into overbought territory, a short-term pullback could be expected, especially if it coincides with resistance near recent highs.
Recent Candlestick Action
Looking at the last five trading sessions, the price action has been constructive. There have been multiple tests of the $60 level, with buyers stepping in each time to support the stock. The daily wicks suggest some back-and-forth action, but there hasn’t been any aggressive selling pressure.
The most recent candle shows a strong close near the high of the day, which indicates buyers were still in control at the end of the session. If the stock can hold above this level, it could open the door for a continued move higher. If there’s any weakness, the 50-day moving average would be the first key support level to watch.
Analyst Ratings
📈 Upgrades:
🔹 Jefferies & Co. 🏆 On December 16, 2024, analysts at Jefferies adjusted their stance on BMY, moving it from ‘Hold’ to ‘Buy’ with a new price target of $70. The firm pointed to a promising drug pipeline and strong growth prospects in the oncology sector as key reasons for the upgrade.
🔹 Atlantic Equities 🚀 Back in July 2023, Atlantic Equities reaffirmed its confidence in BMY by maintaining an ‘Overweight’ rating and lifting its price target from $85 to $88. The optimism stemmed from the strong performance of the company’s core drugs and late-stage trials showing encouraging results.
📉 Downgrades:
🔻 Citigroup ⚠️ In October 2024, Citigroup shifted its rating from ‘Buy’ to ‘Neutral’ while cutting its price target from $75 to $55. Analysts expressed concerns over looming patent expirations, which could expose the company to revenue erosion from generic competition.
🔻 Morgan Stanley ⏳ Later that month, Morgan Stanley took a cautious stance, maintaining an ‘Underweight’ rating and slightly tweaking its price target from $61 to $60. Their primary concern was the company’s high debt burden and potential difficulties in sustaining profit margins amid rising costs.
🎯 Consensus Price Target:
The latest consensus among analysts sets BMY’s 12-month price target at $60.58, reflecting a balanced outlook. While the stock has near-term upside potential, analysts remain measured in their expectations as they weigh growth opportunities against competitive and financial risks.
Earnings Report Summary
Bristol Myers Squibb wrapped up the last quarter of 2024 on a mostly positive note, reporting $12.3 billion in revenue—an 8% jump from the same time last year. When factoring out currency fluctuations, that increase rises to 9%. The biggest contributors to this growth were strong demand for Eliquis and the company’s newer treatments in its Growth Portfolio. However, some older drugs, like Sprycel, Revlimid, Abraxane, and Pomalyst, took a hit due to growing generic competition.
Looking at different markets, U.S. sales climbed 9% to $8.6 billion. The company’s newer treatments and continued strength in Eliquis helped push those numbers higher, even as some legacy drugs lost ground to generics. Overseas, sales reached $3.7 billion, up 5% overall and 9% when adjusting for currency shifts. That growth was also fueled by the company’s newer product lineup.
On the expense side, there were some changes worth noting. The company’s gross margin took a hit, falling from 76.1% to 61.0%. This was largely due to impairment charges and shifts in product mix. Non-GAAP gross margin was a little better but still dipped from 76.4% to 74.0%.
Marketing, selling, and administrative costs held steady at $2.1 billion, while research and development spending saw a big increase. On a GAAP basis, R&D expenses jumped 29% to $3.2 billion, mostly due to recent acquisitions and impairment charges. The non-GAAP figure also increased, rising 13% to $2.8 billion.
Earnings-wise, the company reported a sharp drop in GAAP net income, landing at just $72 million, or $0.04 per share—down significantly from $1.8 billion ($0.87 per share) a year earlier. On a non-GAAP basis, things looked a little better, with earnings coming in at $3.4 billion ($1.67 per share), only slightly below the $3.5 billion ($1.70 per share) reported last year.
One of the biggest highlights was the company’s Growth Portfolio, which saw worldwide revenue jump 21% to $6.4 billion, or 23% when adjusting for currency. This boost came largely from rising demand for newer treatments like Reblozyl, Breyanzi, Camzyos, Yervoy, and Opdualag.
On the flip side, the company’s older drugs saw some headwinds. Revenue from its Legacy Portfolio slipped 4% to $6.0 billion, mostly because of patent expirations and competition from generics. That said, demand for Eliquis helped offset some of the declines.
Overall, the quarter showcased strong growth from the company’s newer treatments, even as some of its older products continued to face challenges. The focus now will be on how well the company can keep expanding its pipeline while managing pressures from generic competition.
Financial Health and Stability
Strengths
- Strong cash generation, with over $15 billion in operating cash flow
- High gross margins, contributing to steady profitability
- Revenue grew 7.5% year over year, a positive sign for long-term stability
Areas to Watch
- Net income recently declined significantly, with earnings growth down nearly 96% year over year
- A debt-to-equity ratio over 300% means the company is carrying a substantial debt load
- With an increasing number of competitors and upcoming patent expirations, revenue growth will need to come from new drug development
BMY still has a healthy cash position, with nearly $11 billion in cash on hand. This gives the company flexibility for acquisitions, research, and—most importantly for income investors—sustaining its dividend through economic cycles.
Valuation and Stock Performance
BMY is currently trading near its 52-week high of $61.10, a significant rebound from its 52-week low of $39.35. Those who bought the dip last year have seen solid gains, and momentum remains strong.
From a valuation perspective, the stock looks reasonably priced:
- Forward P/E of 8.83, suggesting a solid value compared to the broader market
- PEG ratio of 1.36, indicating reasonable expectations for future growth
- Price-to-sales ratio of 2.51, in line with historical averages
Momentum indicators also show strength, with the stock trading above both its 50-day ($57.38) and 200-day ($51.22) moving averages. Additionally, the stock’s beta of 0.44 suggests it experiences lower volatility than the overall market, making it a good choice for conservative investors looking to avoid excessive price swings.
Risks and Considerations
Earnings Volatility
One of the biggest concerns for BMY right now is its earnings volatility. The company reported a net income loss of nearly $9 billion, translating to a diluted EPS of -$4.41. While some of this can be attributed to non-cash adjustments, sustained earnings declines could eventually impact dividend growth.
High Debt Load
Pharmaceutical companies often operate with significant leverage, but BMY’s debt-to-equity ratio above 300% is on the higher end. While current cash flow levels comfortably cover interest payments, any prolonged weakness in revenue or rising borrowing costs could limit financial flexibility in the future.
Patent Expirations and Competition
BMY’s future earnings growth will depend heavily on new drug development. As patents expire on some of its best-selling drugs, the company must rely on its pipeline to fill the revenue gap. Increased competition in the pharmaceutical space also means pricing pressure, which could impact margins over time.
Regulatory Risks
Like all major pharmaceutical companies, BMY faces ongoing regulatory scrutiny. Changes in healthcare policy, pricing regulations, or unexpected legal challenges could have an impact on profitability and stock performance.
Final Thoughts
For dividend-focused investors, Bristol-Myers Squibb offers a mix of strong income potential, steady dividend growth, and reasonable valuation. The 4.15% yield is well above the market average, and the company’s long history of dividend increases provides reassurance that it will continue rewarding shareholders.
That being said, investors should keep an eye on earnings trends, debt levels, and the company’s ability to execute on new drug development. While BMY remains a reliable dividend payer, the long-term outlook will depend on its ability to manage financial risks and maintain stable revenue growth.
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