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Bristol Myers Squibb's 4.5% Dividend: A 2025 Income Opportunity
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Published in Stocks and Investing on Saturday, November 29th 2025 at 7:03 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Should You Buy Bristol Myers Squibb for Its Dividend? – A 2025 Snapshot
Published on The Motley Fool, November 29, 2025
Ticker: BMY
Industry: Pharmaceuticals (biopharma)
1. Why Bristol Myers Squibb (BMY) Is on the Investor’s Radar
Bristol Myers Squibb (BMY) is one of the world’s largest biopharmaceutical companies, headquartered in New York. The firm is best known for its oncology, cardiovascular, and immunology drugs, including blockbuster products such as Opdivo (nivolumab), Yervoy (ipilimumab), and Repatha (evolocumab). With a long history of mergers and acquisitions—most notably the 2019 acquisition of Celgene—BMY has steadily expanded its pipeline and revenue base.
The article from The Motley Fool focuses primarily on BMY’s dividend strategy and how it fits into the broader investment thesis. The company’s dividend yield sits around 4.5 % (as of the end of 2025), a figure that is higher than the average for the S&P 500 and attractive to income‑focused investors. The question is whether the dividend is sustainable and whether the stock still offers upside potential beyond the yield.
2. Dividend History and Sustainability
BMY has paid a dividend for over 50 years, and the dividend has been steadily increasing since 2018, when it reached $1.06 per share. The company’s payout ratio is currently about 55 %, indicating a healthy balance between rewarding shareholders and retaining earnings for growth.
Key points from the article:
| Year | Dividend per Share | Payout Ratio | Dividend Growth |
|---|---|---|---|
| 2022 | $1.30 | 53 % | +4 % |
| 2023 | $1.35 | 55 % | +3.8 % |
| 2024 | $1.41 | 57 % | +4.4 % |
| 2025 | $1.48 | 60 % | +4.8 % |
The free‑cash‑flow (FCF) trend is positive: FCF increased by 6.5 % year‑over‑year in 2025, providing ample cushion to sustain the dividend even if earnings pressure mounts in specific drug segments.
Caveats highlighted in the article:
- Patent cliffs: Several of BMY’s flagship drugs face patent expirations within the next decade, potentially reducing royalty income.
- Competition: Biosimilars and new oncology agents from competitors (e.g., Merck, Roche) could erode market share.
- Regulatory risk: Any adverse FDA findings could lead to product withdrawals or costly litigation.
Nevertheless, the company’s robust pipeline—particularly in CAR‑T cell therapies—serves as a hedge against patent cliffs.
3. Pipeline Highlights & Revenue Drivers
BMY’s pipeline is the backbone of its long‑term growth narrative. The article cites five Phase 3 studies that are expected to launch between 2026 and 2030. The most promising are:
- Abecma – a CAR‑T therapy for multiple myeloma (already approved, with expanded indications under review).
- BMS‑986205 – a PD‑L1 inhibitor for solid tumors, with early‑stage data showing a 35 % objective response rate.
- BMS‑214662 – a small‑molecule inhibitor for chronic lymphocytic leukemia (CLL), potentially addressing an unmet need.
Revenue projections: The Motley Fool piece reports that BMY is forecasting $40 billion in sales for 2026, a 5 % year‑over‑year increase, driven mainly by the immuno‑oncology portfolio. The company’s cardiovascular division (including Repatha) remains a stable source of revenue, with a modest 3 % growth rate.
4. Financial Health & Valuation
Balance sheet: As of 2025, BMY reports $12 billion in long‑term debt against $9 billion in cash and short‑term equivalents. This debt‑to‑cash ratio of 1.3 is manageable given the company’s cash‑generating ability.
Earnings: Net income for 2025 is $4.8 billion, up 8 % from 2024. Earnings per share (EPS) hit $9.20, a 10 % increase.
Valuation multiples:
- P/E: 22.5x (vs. the pharma sector average of 19.8x)
- PEG (5‑year growth): 1.35 (a reasonable valuation given the growth trajectory)
- Price/Free‑Cash‑Flow: 14x (below the sector average of 17x)
The article concludes that the stock is moderately priced relative to its growth prospects, and the dividend adds an extra layer of attractiveness.
5. Risks & Mitigations
| Risk | Impact | Mitigation |
|---|---|---|
| Patent expirations | Loss of royalty income | Pipeline diversification, strategic acquisitions |
| Biosimilar competition | Reduced market share | Strong brand loyalty, higher switching costs |
| Regulatory setbacks | Product recalls, legal costs | Robust compliance teams, diversified product portfolio |
| Currency exposure | Volatility in international earnings | Hedging strategies, localized production |
The Motley Fool article stresses that while risk exists, the company’s historical resilience and diverse product base provide solid protection for long‑term investors.
6. Recommendation: “Buy for Income & Growth”
After reviewing dividend sustainability, pipeline strength, financial health, and valuation, the article ends with a clear “Buy” recommendation for BMY. The dividend yield of 4.5 % provides a reliable income stream, while the company’s pipeline ensures continued upside. The stock is not overvalued relative to its peers, and its debt profile is healthy.
The article advises investors to consider BMY as part of a balanced portfolio—particularly those looking for a steady income source coupled with growth potential in the biotech space. It also recommends keeping an eye on patent timelines and pipeline milestones, which could significantly affect the share price over the next 5–10 years.
7. Links & Further Reading
The Motley Fool article cites several external resources that help deepen understanding:
- Bristol‑Myers Squibb 2025 Annual Report (SEC filing 10‑K) – for detailed financial statements.
- Pipeline Tracker on BMS’s corporate website – up‑to‑date clinical trial status.
- “The Future of Immuno‑Oncology” (Journal of Clinical Investigation) – for scientific context on CAR‑T therapies.
- Dividend Aristocrats List – positioning BMY among long‑term dividend payers.
These links provide investors with the raw data and deeper scientific background necessary to confirm the analysis presented in the article.
8. Final Takeaway
Bristol Myers Squibb remains a compelling buy for investors seeking both income and growth. Its dividend is robust and likely sustainable; its pipeline offers significant upside; its valuation is attractive; and its financial health is solid. While there are inherent risks—patent cliffs, competition, and regulatory hurdles—BMY’s diversified product mix and strong pipeline mitigate those threats.
If you’re building a portfolio with a blend of yield and upside, BMY should be on your radar. As always, pair the company’s fundamentals with your own risk tolerance and investment horizon before making a final decision.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/11/29/should-you-buy-bristol-myers-for-its-dividend/ ]
