Top Healthcare Dividend Raises of 2025: Why Bristol Myers Squibb and Zoetis Outshine the Competition

For income-focused investors, the healthcare sector has long been a reliable haven, offering a blend of stable dividends and growth potential. In 2025, two standout performers-Bristol Myers Squibb (BMY) and Zoetis (ZTS)-have reinforced their appeal with robust dividend increases, strong financial fundamentals, and strategic positioning in high-growth markets. This analysis explores why these two healthcare giants are poised to outshine their peers in 2026 and beyond.

Bristol Myers Squibb: A Dividend Powerhouse with 17 Years of Growth

Bristol Myers Squibb has cemented its reputation as a dividend aristocrat, with a 94-year history of uninterrupted payouts and a 17-year streak of annual increases. In 2025, the company announced a 1.6% raise in its quarterly dividend, lifting the payout to $0.63 per share for the February 2026 distribution. This adjustment translates to a forward dividend yield of approximately 4.6% at current share prices, making BMY one of the highest-yielding healthcare stocks in the S&P 500.

The company's financial strength underpins this generosity. In Q3 2025, BMY reported revenue of $12.2 billion, surpassing analyst expectations by 3.7%, driven by blockbuster drugs like Opdivo (immunotherapy) and Eliquis (anticoagulant). Free cash flow (FCF) for the quarter reached $5.9 billion, comfortably exceeding the $1.3 billion in dividend payments, ensuring sustainability for future hikes. With a payout ratio of roughly 22%, BMY has ample room to continue growing its dividend even amid economic uncertainty.

For long-term investors, BMY's track record is compelling. Its 17-year consecutive raise streak reflects disciplined capital allocation and confidence in its therapeutic pipeline. As a global leader in oncology and immunology, the company is well-positioned to benefit from aging demographics and rising demand for innovative therapies.

Zoetis: Leveraging Animal Health Growth for Shareholder Returns

While Zoetis may not match BMY's yield, its 1.62% dividend rate is far from unattractive, especially when paired with its dominant position in the expanding animal health market. In 2025, ZTS announced a 6% dividend increase for Q1 2026, raising the payout to $0.53 per share. This move underscores management's confidence in the company's financial resilience and long-term growth trajectory.

Zoetis' fundamentals are equally impressive. In Q3 2025, the company reported revenue of $2.4 billion and adjusted net income of $754 million, with free cash flow generation of $2.2 billion. Analysts project this figure could surge to $3.9 billion by 2035, driven by innovation in products such as OA pain treatments and parasiticide advancements. Two-thirds of Zoetis' revenue comes from the companion animal segment, a sector buoyed by rising pet ownership and discretionary spending on veterinary care.

The animal health market itself is expanding rapidly. According to industry reports, global demand for animal health products is expected to grow at a compound annual rate of 7.5% through 2030, fueled by increased livestock production and pet humanization trends. Zoetis, as the largest pure-play player in this space, is uniquely positioned to capitalize on these tailwinds.

Why These Two Outshine the Competition

When comparing BMY and ZTS, the contrast is stark but complementary. BMY offers a higher yield and a proven track record of dividend growth, making it ideal for income-focused investors prioritizing immediate returns. ZTS, meanwhile, provides exposure to a high-growth niche (animal health) with strong reinvestment opportunities and a conservative payout ratio (around 35%), leaving room for further increases.

Both companies also benefit from structural trends. BMY's focus on oncology and immunology aligns with the rising prevalence of chronic diseases, while ZTS' animal health business thrives on demographic shifts like urbanization and the "pet as family" mindset. Their diversified revenue streams and strong balance sheets further insulate them from sector-specific risks.

Conclusion: A Dual-Pronged Strategy for 2026 Portfolios

For investors seeking a balanced approach to healthcare dividends, BMY and ZTS represent a powerful combination. BMY's 4.6% yield and 17-year raise streak offer immediate income and reliability, while ZTS' market-leading position in animal health provides growth potential and defensive characteristics. Together, they exemplify the sector's ability to deliver both income and capital appreciation-a rare but invaluable trait in today's market.

As 2026 approaches, these two stocks are not just top performers-they are strategic anchors for portfolios seeking stability, growth, and resilience in an uncertain economic landscape.