Assessing the Sustainability and Growth of BMY's Dividend Payments
Bristol-Myers Squibb Co (BMY, Financial) recently announced a dividend of $0.6 per share, payable on 2024-02-01, with the ex-dividend date set for 2024-01-04. 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 look into Bristol-Myers Squibb Co's dividend performance and assess its sustainability.
What Does Bristol-Myers Squibb Co Do?
Bristol-Myers Squibb Co 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-Myers Squibb Co 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. Dividends are currently distributed on a quarterly basis.
Bristol-Myers Squibb Co has increased its dividend each year since 1987. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 37 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 4.28% and a 12-month forward dividend yield of 4.53%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Bristol-Myers Squibb Co's annual dividend growth rate was 9.20%. Extended to a five-year horizon, this rate decreased to 7.20% per year. And over the past decade, Bristol-Myers Squibb Co's annual dividends per share growth rate stands at 4.40%.
Based on Bristol-Myers Squibb Co's dividend yield and five-year growth rate, the 5-year yield on cost of Bristol-Myers Squibb Co stock as of today is approximately 6.06%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Bristol-Myers Squibb Co's dividend payout ratio is 0.58.
Bristol-Myers Squibb Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Bristol-Myers Squibb Co's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Bristol-Myers Squibb Co's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Bristol-Myers Squibb Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bristol-Myers Squibb Co's revenue has increased by approximately 12.10% per year on average, a rate that outperforms approximately 70.21% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Bristol-Myers Squibb Co's earnings increased by approximately 18.00% per year on average, a rate that outperforms approximately 61.05% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 21.40%, which outperforms approximately 73.73% of global competitors, underscores its financial health and potential for continued dividend growth.
Concluding Insights on Bristol-Myers Squibb Co's Dividend Profile
In conclusion, Bristol-Myers Squibb Co's consistent dividend payments, coupled with a commendable dividend growth rate, payout ratio, profitability, and growth metrics, paint a promising picture for value investors focused on income generation. The company's strong market position in the pharmaceutical industry and its focus on innovation suggest that its dividends could remain sustainable and potentially grow in the future. Investors should consider these factors when evaluating Bristol-Myers Squibb Co as a potential addition to their portfolios. Will Bristol-Myers Squibb Co continue its legacy as a dividend aristocrat in the years to come?
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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.
