Should You Buy Bristol Myers Squibb Stock For Its Cash?
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Bristol Myers Squibb (BMY) shares offer a free cash flow yield of 9.1%, compared with 4.3% for the median S&P 500 company. Such a high yield usually indicates either a bargain stock or a business that investors expect to decline. The drugmaker remains difficult to place, because its profit rose over the past year while its cash fell. So how much of that cash really belongs to you?
You Own The Cash, But Debt Comes First
All of the cash belongs to you, but only after Bristol Myers Squibb pays its lenders. A share gives you a claim on the free cash a business produces, just as it gives you a claim on profit, regardless of whether the company distributes or retains the money. Cash kept inside the business remains yours. When investors notice that cash, the share price tends to follow, especially when the cash is growing.
Net debt at Bristol Myers Squibb, representing borrowings minus cash, equals 27% of its market value. Factoring in that debt brings the cash yield on the entire business to 7.2%, meaning lenders hold a claim on a portion of the cash before you do.
How Bristol Myers Squibb Makes Its Cash
Bristol Myers Squibb sells medicines, led by the blood thinner Eliquis, which brought in 30% of its revenue in fiscal 2025. These medicines are profitable. Over the twelve months to June 2026, the company kept 28.1% of revenue as operating income, up from 20.9% a year earlier. The drugmaker also spends little on plants and equipment, putting 10.5% of the cash brought in by operations toward capital spending.
Free cash flow, however, has not kept pace with profit. The twelve-month measure has fallen at every quarter end since September 2025. Free cash flow dropped to $11.4 billion in the twelve months to June 2026, compared with $14.6 billion a year earlier. The June 2026 quarter alone brought in $3.09 billion, down from $3.56 billion in the June 2025 quarter.
Bristol Myers Squibb’s debt has at least come down. Total debt declined to $45.1 billion at the end of June 2026, dropping from $50.9 billion a year earlier. Over the twelve months to June 2026, operating income covered the interest bill eight times over.
Bristol Myers Squibb’s Older Drugs Are Losing Sales
Management expects sales of its older drugs, which it calls its legacy portfolio, to fall 4% to 6% in 2026. That group includes Eliquis, which management expects to grow 20% to 25%, so the other older drugs are expected to fall faster. Revlimid lost the most among single drugs in fiscal 2025, posting a sales drop to $2.95 billion from $5.77 billion a year earlier.
Management says its newer medicines, which it calls its growth portfolio, are making up for that decline. Revenue from those treatments rose 14% in the June 2026 quarter, and total company revenue increased 3.1% over the twelve months to June 2026. In July, management raised its 2026 revenue forecast to a midpoint of $49.5 billion, up from $46.8 billion in April.
Judged on sales and profit, Bristol Myers Squibb looks more like a bargain than a business in decline. The share price appears to assume that losses on the older drugs will win out in time. Both the forecast fall in those sales and the past year’s drop in free cash flow support that worry.
Two questions remain open for anyone buying the stock for its cash: whether free cash flow turns back up to follow operating income, and whether the company keeps cutting its debt while its older drugs shrink. Twelve-month free cash flow is the measure to watch when Bristol Myers Squibb next reports, expected in October 2026.
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