Why Bristol-Myers Squibb (BMY) Is One of the Best Cheap Stocks to Buy for 2025?

Bristol-Myers Squibb (BMY) has been a favorite among value investors for years, and for good reason. The pharmaceutical giant boasts a strong dividend history, a robust pipeline of new drugs, and a valuation that suggests it is undervalued compared to its peers and the broader market. As we look ahead to 2025, there are several compelling reasons to consider adding BMY to your portfolio.

Undervalued Valuation

One of the primary reasons to consider BMY is its undervalued valuation. As of January 19, 2025, BMY's market capitalization was $114.17 billion, with an enterprise value of $157.19 billion. Its price-to-sales (PS) ratio of 2.4x is significantly lower than the peer average of 4.7x and the industry average of 3.1x. Additionally, BMY's EV/EBITDA ratio of 8.2x is lower than the industry average of 9.64x, indicating that the stock is relatively cheap compared to its earnings and cash flow.



Strong Dividend History

BMY has a long history of paying and increasing dividends to its shareholders. The company has paid an annual dividend since 2005, with a current yield of 4.41% and a 10-year dividend growth rate of 7.14%. BMY's dividend payout ratio is not provided, but its earnings yield is -6.36%, suggesting that the company's dividend is well-covered by its earnings.

Robust Pipeline of New Drugs

BMY's pipeline is another key reason to consider the stock. The company has a strong track record of developing and commercializing new drugs, and its pipeline is filled with promising candidates. Some of the most exciting drugs in BMY's pipeline include:

* Opdivo (nivolumab), a cancer immunotherapy drug that has shown promising results in clinical trials.
* Eliquis (apixaban), a blood thinner that has been approved for use in patients with atrial fibrillation and venous thromboembolism.
* Breyanzi (lisocabtagene marale), a cancer immunotherapy drug that has shown promising results in clinical trials for the treatment of melanoma and non-small cell lung cancer.

Experienced Management Team

BMY's management team is another strength of the company. The team has a proven track record of successfully navigating the complex and competitive pharmaceutical industry, and has consistently delivered strong financial results for shareholders. The company's board of directors is also highly experienced and diverse, with a strong track record of governance and oversight.

Conclusion

Bristol-Myers Squibb is one of the best cheap stocks to buy for 2025, thanks to its undervalued valuation, strong dividend history, robust pipeline of new drugs, and experienced management team. As the company continues to grow and innovate, it is well-positioned to deliver strong returns for shareholders in the coming years.