Biopharmaceutical firm Bristol-Myers Squibb Company (BMY) offers products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases. As of October 26, the company had 50+ compounds in development and studied 35+ disease areas.

On December 8, BMY announced a quarterly dividend of $0.57 per share on its $0.10 par value common stock, payable to shareholders on February 1, 2023. This represents a 5.6% increase year-over-year and marks the 91st consecutive year of dividend payment.

Its annual dividend of $2.28 yields 2.89% on the current share price. It has a four-year average yield of 3.03%. The company’s dividend payouts have increased at a 9.6% CAGR over the past three years and 6.7% CAGR over the past five years.

The stock has gained 39.9% over the past year and 26.4% year-to-date to close its last trading session at $78.83. It has gained 3.8% over the past month. It is trading higher than its 50-day moving average of $75.70 and 200-day moving average of $74.18.

Here are the factors that could influence BMY’s performance in the upcoming months:

Solid Financials

For the fiscal third quarter ended September 30, BMY’s worldwide revenues from Eliquis increased 10% year-over-year to $2.66 billion, while its total new product portfolio revenues rose 61% from the prior-year quarter to $553 million.

Net earnings attributable to BMS improved 3.9% year-over-year to $1.61 billion. Its non-GAAP EPS came in at $1.99, up 3.1% from the prior-year period.

Higher-than-industry Profitability

BMY’s trailing-12-month gross profit margin of 79.42% is 43.7% higher than the industry average of 55.29%. Its trailing-12-month EBITDA margin of 44.35% is significantly higher than the industry average of 3.73%.

Its trailing-12-month ROCE, ROTC, and ROTA of 19.11%, 8.22%, and 6.80% compare to their respective industry averages of negative 39.69%, 21.95%, and 31.22%.

Cheap Valuation

In terms of its forward non-GAAP P/E, BMY is trading at 10.35x, 46.5% lower than the industry average of 19.33x. The stock’s forward EV/EBITDA multiple of 10.10 is 24.5% lower than the industry average of 13.37. In terms of its forward Price/Cash Flow, the stock is trading at 10.27x, 39.6% lower than the 17.01x industry average.

POWR Ratings Reflect Promising Prospects

BMY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating 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 a Value grade of A, in sync with its lower-than-industry valuation multiples.

The stock also has a Stability grade of B, consistent with its five-year beta of 0.39. Its B grade for Quality is justified by its solid profitability.

In the 160-stock Medical – Pharmaceuticals industry, it is ranked #3.

Click here to see the additional POWR Ratings for BMY (Growth, Momentum, and Sentiment).

View all the top stocks in the Medical – Pharmaceuticals industry here.

Bottom Line

Big pharma player BMY has a long history of paying dividends, which reflects its robust cash-generation ability. Moreover, analysts expect its EPS to grow 4.1% per annum over the next five years. With the stock trading above its moving averages, indicating an uptrend, BMY might be a solid buy now.

How Does Bristol-Myers Squibb Company (BMY) Stack up Against Its Peers?

While BMY has an overall POWR Rating of A, one might consider looking at its industry peers, Novo Nordisk A/S (NVO) and Pfizer Inc. (PFE), which also have an overall A (Strong Buy) rating.

BMY shares rose $0.32 (+0.41%) in premarket trading Monday. Year-to-date, BMY has gained 30.89%, versus a -15.92% rise in the benchmark S&P 500 index during the same period.

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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