Leading pharma company Bristol-Myers Squibb Company (BMY) has 33 consecutive years of dividend payments and six consecutive years of dividend growth. The company paid a quarterly dividend of $0.57 per share on February 1, 2023, representing an increase of 5.6% over its previous quarterly dividend of $0.54 per share.
Its annual dividend of $2.28 per share translates to a 3.21% yield on the current market price, higher than its four-year dividend yield of 3.02%. The company’s dividend payouts have grown at a CAGR of 9.2% over the past three years and 6.9% over the past five years.
BMY’s full-year revenue and EPS aligned with analysts’ expectations in the fiscal year 2022. The company provided its fiscal year 2023 EPS guidance range of $7.95 - $8.25. Its total revenues are expected to increase by approximately 2% at reported rates and approximately 2%, excluding foreign exchange.
The stock has gained 5.5% over the past year to close the last trading session at $71.11. BMY has a 24-month beta of 0.27.
Here’s what could influence BMY’s performance in the upcoming months:
Robust Financials
BMY’s U.S. revenues increased 5.4% from the prior-year period to 7.93 billion in the fourth quarter, which ended December 31, 2022. Its total in-line products and new product portfolio revenue increased 7.4% year-over-year to $8.97 billion.
Also, its total expenses decreased 5.7% year-over-year to $9.55 billion, while its non-GAAP EPS stood at $1.82. Non-GAAP net earnings attributable to BMY stood at $3.87 billion.
In the fiscal year 2022, non-GAAP net earnings attributable to BMY came in at $16.50 billion, or $7.70 per share, compared to non-GAAP net earnings of $16.10 billion, or $7.16 per share in the prior year.
Moreover, its revenues for in-line products rose 7% from the prior year to $33.30 billion. Its new product portfolio revenues grew to $2.03 billion, representing growth of 87.4% from the prior-year, driven by the launch of Opdualag and higher demand for Abecma and Reblozyl.
Giovanni Caforio, M.D., Board Chair and CEO of the company, said, “Our financial strength, talented workforce, and proven ability to execute will enable us to continue to progress our pipeline and invest in future sources of innovation. With a younger and more diversified portfolio, promising mid-to-late stage registrational assets, and a deep early-stage pipeline, I am confident that the company is well positioned for multiple waves of innovation that will support long-term growth.”
Favorable Analysts’ Estimates
Analysts expect BMY’s EPS to rise 8.9% year-over-year to $2.10 in the second quarter ending June 2023. Its revenue for the same quarter is likely to grow marginally to $11.95 billion from its prior-year quarter.
Similarly, its EPS for the current fiscal year ending December 2023 is expected to rise 4.2% year-over-year to $8.02, while its revenue is expected to increase 1.7% year-over-year to $46.94 billion.
Moreover, the company has surpassed its consensus EPS and revenue estimates in each of the trailing four quarters, which is quite impressive.
Discounted Valuation
In terms of forward non-GAAP P/E, BMY is trading at 8.86x, which is 55.7% lower than the 20.02x industry average. The stock’s 9.27x forward EV/EBIT is 46.6% lower than the industry average of 17.34x.
Also, its forward Price/Cash flow multiple of 7.83 is 51.4% lower than the 16.12 industry average, while its forward EV/EBITDA multiple of 8.7 is 35.1% lower than the industry average of 13.39x.
POWR Ratings Show Promise
BMY has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. BMY has an A grade for Value, in sync with its discounted valuation.
Its B grade for Stability is justified by its 60-month beta of 0.42. In addition, the stock has a B grade for Sentiment in sync with favorable analysts’ sentiment.
BMY is ranked #2 out of 174 stocks in the Medical – Pharmaceuticals industry.
To access additional BMY ratings for Growth and Momentum, click here.
Bottom Line
BMY witnessed robust growth in the fiscal year 2022, driven by strong commercial execution and continued progress of the company’s pipeline.
The company is committed to returning value to its shareholders through attractive dividends. Also, considering its solid fundamentals, the stock might be a good dividend stock to buy now.
How Does Bristol-Myers Squibb Company (BMY) Stack up Against Its Peers?
BMY has an overall POWR Rating of A, equating to a Strong Buy rating. Check out these other stocks within the Medical – Pharmaceuticals industry with an A (Strong Buy) rating: Novo Nordisk A/S (NVO), Novartis AG ADR (NVS), and Astellas Pharma Inc. ADR (ALPMY).
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BMY shares fell $0.26 (-0.37%) in premarket trading Tuesday. Year-to-date, BMY has declined -0.90%, versus a 5.59% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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