The Motley Fool Take Dividends and Growth

Bristol Myers Squibb (NYSE: BMY) is a big drugmaker recently trading at a bargain price— with a forward-looking price-to-earnings (P/E) ratio in the single digits. A key reason for this low valuation is that the company faces the prospect of sales declines beginning in 2022, when generic versions of its blockbuster drug Revlimid start being available.

BMS deserves investors’ attention, though: Its current lineup includes multiple blockbuster stars, including the blood thinner Eliquis, cancer immunotherapy Opdivo, and multiple myeloma drug Pomalyst. Its newer drugs should soon begin to kick in significant sales, especially multiple sclerosis therapy Zeposia and anemia drug Reblozyl.

The pipeline is also loaded with potential winners. The company hopes to significantly expand the number of Opdivo’s approved indications. It’s evaluating Zeposia in late-stage studies targeting Crohn’s disease and ulcerative colitis. The company also has promising cancer cell therapies in ide-cel and liso-cel, plus other solid candidates.

Wall Street analysts think Bristol Myers Squibb will deliver average annual earnings growth of more than 20% over the next five years. Add to that growth the drugmaker’s dividend (recently yielding nearly 3%), and you’ve got a stock likely to be a big winner for long-term investors. (The Motley Fool owns shares of and has recommended Bristol Myers Squibb.)