Bristol Myers Squibb Is A Good Dividend Stock: Should You Buy?

High Dividend Yield

BMY pays $1.96 in dividends annually, yielding 3.10% at the current share price. It has a dividend payout ratio of 26.18%. The company’s four-year average dividend yield stands at 2.97%, 127.2% higher than the industry average  1.31%. Its one-year, three-year and five-year yields on costs have remained constant at 0.03%, which is higher than the respective industry averages.

BMY’s dividend payouts have increased at a CAGR of 6% over the past three years, and 4.6% over the past five years.

Impressive Growth Story

BMY’s revenues have increased 62.6% year-over-year, and at a CAGR of 27% over the past three years. Its ebitda  margin improved 106.1% over the past year, and at a rate of 58.5% per annum over the past three years.

Furthermore, the company’s total assets and levered free cash flow have increased at CAGRs of 52.3% and 97.5%, respectively, over the past three years.

Discounted Valuation

In terms of non-GAAP forward p/e, BMY is currently trading at 8.43x, 65.2% lower than the industry average  24.23x. Its non-GAAP forward PEG ratio of 1.68 is 14.9% lower than the industry average 1.97x.

The company’s forward price/sales and price/cash flow multiples of 3.05 and 8.64, respectively,  compare favorably with  industry averages.

Consensus Ratings and Price Target Indicates Potential Upside

BMY has an average broker rating of 1.45, indicating favorable analyst sentiment. Of the 19 Wall Street analysts that rated the stock, 14 rated it either Buy or Strong Buy and five rated it Hold.

Analysts expect BMY to hit $75.13 soon, indicating a potential upside of 23.7%.

POWR Ratings Reflect Rosy Prospects

BMY has a B overall rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with the weighting of each optimized to improve overall performance.

BMY has a grade of B for Growth, Sentiment and Value. The grades are justified, given the company’s robust past financial performance, relative undervaluation, and projected growth.

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Roger Keats 1 month ago Member's comment

so we buy and hold