Bristol-Myers Squibb (BMY) has been struggling in the stock market, with its shares declining by 11.6% over the past five years while the S&P 500 has delivered total returns of 97.5%. Despite this underperformance, BMY's stock trades at just 8 times forward earnings, well below the S&P 500's multiple of 21.5. This discrepancy presents an opportunity for value and income-focused investors to consider the stock at the start of 2025.

BMY's recent struggles can be attributed to concerns about upcoming patent expirations for key drugs like Opdivo and Eliquis in 2028, as well as generic competition for its cancer drug Revlimid. However, the company has been executing strategic acquisitions to bolster its pipeline and target high-growth therapeutic areas. For instance, its acquisition of Karuna Therapeutics brought the potential blockbuster schizophrenia treatment KarXT to its neuroscience portfolio.



BMY's third-quarter 2024 results paint a more encouraging picture, with revenues growing 8% year over year to $11.9 billion. U.S. revenues increased 9% to $8.2 billion, and international revenues climbed 7% to $3.7 billion. This broad-based growth suggests that the company's commercial strength extends well beyond its legacy portfolio.

The company's dividend history and growth prospects are also noteworthy. BMY has increased its dividend for 16 consecutive years, with a five-year dividend growth rate of 7.57%. Its current yield is 4.34%, supported by a reasonable payout ratio of 59.8%. BMY's dividend track record is particularly noteworthy, having maintained payments for 93 consecutive years and increased them annually for the past 16 years.



Looking ahead, BMY appears well-positioned to maintain its dividend growth momentum. Its robust pipeline, strategic acquisitions, and strong cash flows provide the company with ample flexibility to continue its dividend growth while investing in future initiatives. However, investors should be patient, as these opportunities may take time to materialize.

In conclusion, BMY's years-long slide may be overdone at this point, presenting an attractive entry point for value and income-focused investors willing to weather some uncertainty. While the company faces legitimate near-term concerns, its proven innovation engine, strategic acquisitions, and robust pipeline paint a compelling longer-term picture. For investors seeking a combination of an attractive yield, outstanding dividend growth history, and deeply discounted valuation, BMY is a stock worth considering at the start of 2025.