2021 Week 35: Bristol-Myers Squibb (NYSE: BMY)

Portfolio Update

The FiveTwenty portfolio received no dividends in the past week.

Past Week Dividend$0
Current Quarter Dividend$0
LifeTime Dividend$0
Estimated Annual Dividend$0
Dividend Scorecard

The capital allocation for the week of 08/29/2021 to 09/04/2021 will be used to add to our position in Bristol-Myers Squibb (NYSE: BMY)

BMY – Position Update

Since our last check-in on BMY in week 29 of 2021, the company reported Q2 2021 earnings on 07/28/2021. Additionally, the share price decreased 1% from $67.30 to $66.60 during the same period.

TTMPrev. Update10-year median
Dividend Streak14 years14 years
Yield2.88%2.85%2.91%
Payout Ratio28.4%130.3%2NA
P/E9.85110.42NA
Entry Criteria Scorecard

1 computed using TTM adjusted EPS of $6.76 as of Q2 2021
2 computed using TTM adjusted EPS of $6.46 as of Q1 2021

Q2 2021 earnings report

Did BMY’s latest earnings report raise any warning flags?

In Q2 2021, BMY had a healthy increase in revenue, adjusted net income, and adjusted EPS over the same period a year ago. Both US and international revenues increased compared to the year ago period driven by building momentum in the new product portfolio and a return to growth by Optivo. Overall, revenue grew 16%, adjusted net income increased 15.6%, and adjusted EPS were 18% higher compared to Q2 2020.

Revenue
(in millions)
Adj. Net Income
(in millions)
Adj. EPS
.
Q2 2020$10,129$3,750$1.63
Q2 2021$11,703$4,336$1.93
% Change16%15.6%18%

As part of the Q2 2021 earnings announcement, BMY reaffirmed its adjusted (non-GAAP) EPS guidance range of $7.35-$7.55. At the same time it lowered its GAAP EPS guidance from a range of $3.18-$3.38 to $2.77-$2.97. Additionally, the company guides for worldwide revenue increase in the high-single digits and a gross margin of 79% for GAAP and 80% for non-GAAP.

Thesis

Why are we adding BMY to the FiveTwenty portfolio?

The Q2 2021 earnings report confirmed our original investment thesis for BMY. The company leaned on its new product portfolio to drive revenue and earnings growth. Additionally, with little share price appreciation since we opened our position, BMY shares continue to offer an attractive price point for share accumulation.

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