We recently compiled a list of the Dividend Contenders List: Top 15. In this article, we are going to take a look at where Bristol-Myers Squibb Company (NYSE:BMY) stands against the other dividend contenders.
Dividend stocks have long been favored by investors for the income they generate, and they become even more appealing when dividends increase over time. Investors frequently seek out companies with a strong history of raising their dividends, as this growth boosts their income over the long term. Sustaining long-term dividend growth is challenging. For instance, “dividend aristocrats” are companies that have grown their dividends consistently for at least 25 years, and only about 68 US companies have been successful in achieving this. This demonstrates how difficult it is to attain such a high standard. However, many companies still manage to build shorter dividend growth histories, showcasing their resilience and potential to reach even greater milestones over time. Dividend contenders are well-regarded for having raised their dividends for 10 straight years, though they have yet to reach the 25-year mark needed to be considered long-term dividend growers.
Investors are drawn to dividend growth stocks, as these stocks have shown strong performance over the years. Data from Ned Davis Research covering the past 50 years revealed that high-quality companies that initiate and increase dividends have delivered higher returns and lower volatility than an equal-weighted index. By holding a portfolio of dividend growth stocks, investors can potentially achieve not only favorable risk-adjusted returns but also a more stable investment experience—one less impacted by the risks of market timing, which can reduce long-term gains. This strategy can help investors build wealth steadily over time, contributing to a more secure financial future.
Recently, tech stocks have surged to the forefront, and investors are capitalizing on this momentum, temporarily overshadowing dividend stocks. However, this shift doesn’t imply a dim outlook for dividend stocks. Over the long term, dividend growth stocks have consistently demonstrated their strength and reliability. According to a report by Nuveen, companies that consistently grow or start paying dividends have delivered higher annualized returns with less volatility compared to other parts of the equity market. Although these dividend growth stocks don’t outperform in every market condition, their solid risk-adjusted returns over extended periods make them a strong foundation for an equity portfolio.
Also read: Dividend Champions List: Top 15
Michael Clarfeld, manager of the Dividend Strategy portfolios at ClearBridge Investments, supports investing in dividend stocks. Clarfeld emphasizes the value of long-term compounding, viewing dividend stocks as essential for a well-rounded portfolio. He advocates for a dividend growth approach, focusing on companies capable of steadily increasing their dividends over time. Instead of chasing high yields for immediate gains, he advises investors to consider total return, which includes the reinvestment of dividends. In an interview with Morningstar, he noted that the average company in his portfolios has compounded dividends at around 9% annually, meaning an investor’s income could potentially double every eight years. Clarfeld further said that dividend investing centers on evaluating a company’s cash flows and how they allocate payouts to investors.
In this dividend contenders list, we will take a look at companies that have raised their payouts for at least 10 consecutive years.
Our Methodology:
This list focuses on dividend contenders—companies known for raising their dividends consistently for 10 years but less than 25. From this group, we selected those with the highest dividend yields as of November 11, ranked from lowest to highest yield.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A pharmacy shelves stocked with pharmaceutical drugs awaiting distribution.
Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of November 11: 3.97%
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based multinational pharmaceutical company. It has traditionally concentrated on treatments for hematology, oncology, immunology, and cardiovascular conditions. In the third quarter, the company made significant progress, highlighted by the landmark US approval of Cobenfy for schizophrenia, ongoing sales growth, robust cash flow generation, and key advancements in its pipeline. The stock has surged by over 14.5% since the start of 2024.
Bristol-Myers Squibb Company (NYSE:BMY) generated $11.9 billion in revenues in the third quarter of 2024, which showed an 8.5% growth from the same period last year. The strong performance in the quarter was fueled by sales growth across its expanded oncology portfolio and effective operational execution. Overall, the results showcased the company’s capability to overcome competitive challenges while driving substantial revenue growth. At the end of the quarter, it had roughly $8 billion available in cash and cash equivalents.
Bristol-Myers Squibb Company (NYSE:BMY) is focused on finishing the year with strong execution, advancing its Growth Portfolio, prioritizing high-growth opportunities, and continuing to achieve transformational results for patients. Worldwide revenues for the Growth Portfolio rose to $5.8 billion in the most recent quarter, up from $4.9 billion in the same period last year, reflecting an 18% increase on a reported basis or 20% when adjusted for foreign exchange effects.
Bristol-Myers Squibb Company (NYSE:BMY), one of the best stocks on our dividend contenders list, currently offers a quarterly dividend of $0.60 per share. The company has been growing its dividends for 18 consecutive years. The stock’s dividend yield on November 11 came in at 3.9%.
Overall BMY ranks 11th on our list of the top dividend contenders. While we acknowledge the potential of BMY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BMY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.