Bristol Myers Squibb (NYSE: BMY) is a $100 billion market cap pharmaceutical firm that has raised its dividend yearly since 2010 and has paid one since 1933.
The inventory at present yields 4.5%. However can it proceed to pay its $0.57 per share quarterly dividend regardless of an anticipated decline in its free money move subsequent yr?
Bristol Myers Squibb has 35 authorised medicine, together with well-known names like blood thinner Eliquis and most cancers fighters Opdivo and Revlimid.
This yr, income and earnings are forecast to dip, although free money move is projected to develop significantly from 2022’s complete. Nonetheless, subsequent yr, whereas earnings are anticipated to get better, free money move will drop, in line with Wall Avenue analysts.
Within the Security Internet mannequin, there is no such thing as a sin greater than falling money move.
Nonetheless, the drug large’s different numbers are very stable. The corporate will probably pay out about $4.6 billion in dividends this yr, which is simply 30% of its anticipated free money move. Subsequent yr’s predicted $4.8 billion in dividend payouts ought to end in a payout ratio of simply 33%.
These numbers are fairly low and make the dividend fairly inexpensive.
Ought to free money move proceed to go south in 2025, the corporate’s dividend security would probably get a downgrade. However given Bristol Myers Squibb’s low payout ratio and its sturdy monitor file of 14 straight years of dividend will increase and 44 straight years with no dividend reduce, the present dividend could be very protected.
Dividend Security Ranking: A
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