Bristol-Myers Squibb (NYSE:BMY) has taken two hits in recent years. The first hit came from the prospect of the expiration of one of its blockbuster anti-platetet drugs, Plavix, in 2012. The second hit came from proposed budgetary cuts for Medicaid and Medicare. Yet the stock is trading near its five -year high. We be believe the stock is a buy, for four reasons:
- A Bullish chart. Amid an unsettled market, the stock has been trading decisively above its 100- and 200-day moving averages.
- Strong financials. Hefty operating margins, above its its peers Pfizer (NYSE:PFE), Abbott Laboratories (NYSE:ABT), Eli Lily (NYSE:LLY) and Merck (NYSE:MRK).
BMY Financials Versus Peers In 2011:
Company BMY PFE LLY MRK ABT SPY Dividend 4.60% 4.4% 5.5% 4.80% 3.80% 1.88% Operating Margin 32.49 21.17 28.21 21.25 19.88 -- Quarterly Earnings Growth 32.7 9.70 -11.2 169 50 -- Quarterly Revenue Growth 4.20 -0.40 8.80 7.10 9 --
- The market has already discounted the expiration of its blockbuster drugs and Medicaid and Medicare budgetary cuts.
- A hefty, 4.60 percent dividend, compared to 1.88% for S&P 500 stocks.
- A strong pipeline of new products, some of which have already gained FDA approval.
Disclosure: I am long BMY, LLY, PFE and ABT.