Bristol-Myers Squibb (NYSE:BMY) Is Due To Pay A Dividend Of $0.60

Bristol-Myers Squibb Company (NYSE:BMY) has announced that it will pay a dividend of $0.60 per share on the 1st of May. This will take the annual payment to 4.6% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Bristol-Myers Squibb

Bristol-Myers Squibb's Dividend Is Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend was quite easily covered by Bristol-Myers Squibb's earnings. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 47.7%. If the dividend continues on this path, the payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.

Bristol-Myers Squibb Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $1.40, compared to the most recent full-year payment of $2.40. This implies that the company grew its distributions at a yearly rate of about 5.5% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Bristol-Myers Squibb Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Bristol-Myers Squibb has seen EPS rising for the last five years, at 5.7% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

We Really Like Bristol-Myers Squibb's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Bristol-Myers Squibb that you should be aware of before investing. Is Bristol-Myers Squibb not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.