Assessing the Dividend Performance of a Pharmaceutical Giant
Bristol-Myers Squibb Co (BMY, Financial) recently announced a dividend of $0.6 per share, payable on 2024-05-01, with the ex-dividend date set for 2024-04-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Bristol-Myers Squibb Co's dividend performance and assess its sustainability.
What Does Bristol-Myers Squibb Co Do?
Bristol-Myers Squibb discovers, develops, and markets drugs for various therapeutic areas, such as cardiovascular, cancer, and immune disorders. A key focus for Bristol is immuno-oncology, where the firm is a leader in drug development. Bristol derives close to 70% of total sales from the U.S., showing a higher dependence on the U.S. market than most of its peer group.
A Glimpse at Bristol-Myers Squibb Co's Dividend History
Bristol-Myers Squibb Co has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1987, earning the prestigious title of a dividend aristocrat, a distinction awarded to companies that have increased their dividend for at least 25 consecutive years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Bristol-Myers Squibb Co's Dividend Yield and Growth
As of today, Bristol-Myers Squibb Co currently has a 12-month trailing dividend yield of 4.34% and a 12-month forward dividend yield of 4.51%. This indicates an expectation of increased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 7.90%, which increased to 8.00% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 5.10%.
Based on the dividend yield and five-year growth rate, the 5-year yield on cost for Bristol-Myers Squibb Co stock as of today is approximately 6.38%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. As of 2023-12-31, Bristol-Myers Squibb Co's dividend payout ratio is 0.31, indicating a healthy balance between distributing profits to shareholders and retaining funds for future growth and downturns. Bristol-Myers Squibb Co's profitability rank, which stands at 9 out of 10, suggests good profitability prospects, with the company reporting net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Bristol-Myers Squibb Co's growth rank of 9 out of 10 suggests a favorable growth trajectory compared to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average annual increase of 4.80%, although this underperforms approximately 55.69% of global competitors. The 3-year EPS growth rate of 5.30% per year, underperforming about 58.51% of global competitors, and a 5-year EBITDA growth rate of 14.80%, underperforming approximately 39.57% of global competitors, are areas where Bristol may seek improvement to ensure continued dividend growth.
Next Steps
In conclusion, Bristol-Myers Squibb Co stands as a resilient player in the pharmaceutical industry, with a commendable track record of dividend payments and growth. The company's prudent payout ratio and strong profitability rank bode well for sustaining future dividends. However, investors should keep an eye on the growth metrics, which suggest there is room for improvement. As Bristol-Myers Squibb Co navigates the competitive landscape, value investors would do well to consider how the company's strategic initiatives may bolster its growth and support its dividend aristocrat status. Will Bristol-Myers Squibb Co continue to provide value to shareholders through its dividends? Only time will tell, but the indicators point towards a positive outlook.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
