Market Leader Bristol-Myers Squibb Stock at 21% Discount, Worth Buying?
Bristol-Myers Squibb (BMY) stock deserves your consideration. Why? Because you get monopoly-like high margins for a discounted price. Here is some data.
- Revenue Growth: Bristol-Myers Squibb saw growth of 4.6% LTM and 0.5% last 3 year average.
- Recent Profitability: Nearly 30.0% operating cash flow margin and 16.5% operating margin LTM.
- Long-Term Profitability: About 28.9% operating cash flow margin and 17.3% operating margin last 3 year average.
- Available At Discount: At P/S multiple of 1.9, BMY stock is available at a 21% discount vs 1 year ago.
While revenue growth helps, this is not a growth perspective. Pricing power and high margins generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. Market tends to reward that.
As a quick background, Bristol-Myers Squibb provides biopharmaceutical products worldwide, specializing in hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 treatments, including Revlimid for multiple myeloma.
| BMY | S&P Median | |
|---|---|---|
| Sector | Health Care | – |
| Industry | Pharmaceuticals | – |
| PS Ratio | 1.9 | 3.3 |
| PE Ratio | 16.4 | 24.0 |
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| LTM* Revenue Growth | 4.6% | 5.3% |
| 3Y Average Annual Revenue Growth | 0.5% | 5.3% |
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| LTM* Operating Margin | 16.5% | 18.7% |
| 3Y Average Operating Margin | 17.3% | 17.8% |
| LTM* Op Cash Flow Margin | 30.0% | 20.4% |
| 3Y Average Op Cash Flow Margin | 28.9% | 19.8% |
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| DE Ratio | 57.6% | 21.0% |
*LTM: Last Twelve Months
- BMY Stock Down -6.3% after 8-Day Loss Streak
- Is Bristol Myers Squibb Undervalued?
- BMY Stock Down -12% after 6-Day Loss Streak
- Is It Time To Buy Bristol Myers Squibb Stock?
- How Will Bristol Myers Squibb Stock React To Its Upcoming Earnings?
- Is Bristol-Myers Squibb Stock A Safe Haven During Tariff Turmoil?
But do these numbers tell the full story? Read Buy or Sell BMY Stock to see if Bristol-Myers Squibb still has an edge that holds up under the hood.
Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. We go beyond just equities. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more during the next 1-3 years, and protect you better if markets crash 20%? We have crunched the numbers.
Stocks Like These Can Outperform. Here Is Data
Here is how we make the selection: We consider stocks > $10 Bil in market cap, and then filter out those with high CFO (cash flow from operations) margins or operating margins. We additionally consider only those stocks that have meaningfully declined in valuation over the past 1 year.
Below are statistics for stocks with this selection strategy applied since 12/31/2016.
- Average 12-month forward returns of nearly 19%
- 12-month win rate (percentage of picks returning positive) of about 72%
But Consider The Risk
That said, BMY isn’t immune to big sell-offs. It fell about 44% during the Dot-Com bubble and 43% in the Global Financial Crisis. The 2018 correction and Inflation Shock also hit hard, with drops over 35%. Even the Covid pandemic wiped roughly 31% off the stock. Solid fundamentals matter, but when the market turns, BMY can still take a meaningful hit.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.