Bristol-Myers Squibb Company

New York Stock Exchange
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Somewhat Bullish +45

There's A Lot To Like About Bristol-Myers Squibb's (NYSE:BMY) Upcoming US$0.63 Dividend - simplywall.st

AI-generated analysis

📅 BMY stock will trade ex-dividend on July 2nd, with the US$0.63 dividend payable on August 3rd.

💰 The trailing dividend yield is 4.4% based on a current share price of US$57.52.

📈 Earnings per share have grown by an average of 9.3% over the last five years.

💵 Dividends are covered by 70% of earnings and only 43% of free cash flow from the prior year.

📉 The company has increased its dividend by approximately 5.5% annually on average over the last decade.

⚠️ High payout ratio relative to earnings suggests limited capacity for heavy business reinvestment.

Bullish Signals
  • The upcoming dividend of US$0.63 provides a trailing yield of 4.4%, offering attractive income potential.
  • Dividends are sustainably covered by both profits (70% payout ratio) and free cash flow (43% payout ratio).
  • Earnings per share have demonstrated consistent growth, averaging 9.3% over the last five years.
  • The company has a strong track record of increasing dividends, lifting payments by an average of 5.5% annually over the past 10 years.
Risk Factors
  • A high payout ratio relative to earnings implies the company may not be able to reinvest heavily in business growth.
  • The dividend is unlikely to support significant future expansion without a sharp change in earnings performance.
Full Analysis
Bristol-Myers Squibb (NYSE:BMY) is approaching its ex-dividend date of July 2nd, with the dividend payment scheduled for August 3rd. The upcoming quarterly dividend is set at US$0.63 per share, following a total annual distribution of US$2.52 over the last 12 months. This results in a trailing yield of approximately 4.4% based on the current share price of US$57.52. The company demonstrates dividend sustainability by covering its payouts with both earnings and free cash flow. Last year, Bristol-Myers Squibb paid out roughly 70% of its earnings and only 43% of its free cash flow toward dividends. Historical data shows steady earnings per share growth averaging 9.3% over the last five years, while dividend increases have averaged 5.5% annually over the past decade. Analysts note that while the company effectively rewards shareholders with a sustainable dividend, it is unlikely to reinvest heavily in business expansion due to the high payout ratio relative to earnings. The stock is viewed as an 'okay' investment for income but not necessarily a standout growth opportunity without significant changes in earnings or valuation.