BRISTOL-MYERS SQUIBB CO (NYSE:BMY) – A Potentially Undervalued Stock Worth Considering

BRISTOL-MYERS SQUIBB CO (NYSE:BMY) was identified by our stock screener as a decent value stock, offering a combination of strong profitability, reasonable financial health, and an attractive valuation. The company’s fundamentals suggest it may be trading below its intrinsic value, making it a candidate for value investors.

Key Strengths

• Valuation (Score: 10/10) – BMY appears significantly undervalued, with a P/E ratio of 6.38, well below both the industry average (19.95) and the S&P500 (26.34). Its forward P/E of 7.62 also suggests a discount compared to peers.
• Profitability (Score: 7/10) – The company maintains strong margins, including a 27.11% operating margin and a 31.16% return on equity, outperforming most competitors.
• Dividend (Score: 7/10) – BMY offers a high dividend yield of 5.29%, supported by a reliable payout history, though its payout ratio (90.59%) warrants monitoring.
• Growth (Score: 5/10) – While past revenue growth has been solid (13.06% annualized), future revenue estimates show a decline (-4.93% expected). However, EPS growth is projected to rebound strongly (37.10% annually).
• Financial Health (Score: 5/10) – The company has manageable debt levels, with a Debt/FCF ratio of 3.80, better than 88% of industry peers. However, its high Debt/Equity ratio (2.67) indicates reliance on external financing.

Why It Stands Out

BMY’s low valuation metrics, combined with strong profitability and a high dividend yield, make it an appealing option for value investors. While growth prospects are mixed, the stock’s current pricing may already reflect these concerns, leaving room for upside if earnings stabilize.

For a deeper look, review the full fundamental analysis of BMY.

Our Decent Value Stock screener provides more stocks with similar characteristics.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.