By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel consensus is bearish, with the key risk being the patent cliff and the potential failure of late-stage pipeline drugs, which could lead to dividend cuts within 2-3 years. The key opportunity, if any, is Bristol Myers Squibb's (BMY) subcutaneous Opdivo formulation, which could retain a significant portion of its current volume post-biosimilar entry, potentially salvaging its dividend.
Risk: Failure of late-stage pipeline drugs leading to dividend cuts
Opportunity: BMY's subcutaneous Opdivo formulation retaining market share
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Both are working hard to get around patent cliffs.
One of them seems to have made more progress on that front.
Over the past few years, Bristol Myers Squibb (NYSE: BMY) and Pfizer (NYSE: PFE), have underperformed broader equities. However, throughout it all, they have maintained their dividend programs intact and currently boast high yields. Bristol Myers' forward yield is a healthy 4.4%, while Pfizer's is even juicier at 6.6%. Neither company is out of the woods yet, though, as both still have challenges ahead, notably patent cliffs. Which one is the safer bet today for dividend seekers? Let's find out.
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Bristol Myers will lose patent exclusivity for Opdivo -- a cancer medicine -- and Eliquis, an anticoagulant it co-markets with Pfizer, by the end of the decade. These two are among the company's best-selling drugs. However, Bristol Myers could overcome these obstacles. The drugmaker's newer, subcutaneous formulation of Opdivo will help attract many older patients and offset losses from biosimilar competition, as it is much easier and faster to administer while still being about as effective.
Bristol Myers is also working on a next-gen anticoagulant, milvexian. This medicine could address a key risk of traditional blood thinners, bleeding, and target many patients who are undertreated due to this potential side effect. Overall, Bristol Myers has a deep pipeline across oncology, immunology, and other therapeutic areas. The company also has a portfolio of newer drugs, some of which, like Reblozyl for anemia in patients with beta-thalassemia, are posting strong sales growth.
Lastly, Bristol Myers has increased its dividends by 65.8% over the past decade. The company still looks like a top pick for dividend seekers.
Besides Eliquis, Pfizer will lose patent exclusivity for other medicines by the end of the decade, including its cancer drug Ibrance. However, the company has newer products that are performing well. One of them is Abrysvo, a vaccine for the respiratory syncytial virus. Pfizer also has a deep pipeline that should yield tangible results over the next few years. The company plans to launch about 20 pivotal studies this year, after starting quite a few in 2025.
Some of Pfizer's candidates look promising. The company's investigational weight loss medicine, MET-097i, is one of them. Another is Pfizer's next-gen cancer drug, PF'4404. Provided Pfizer can make solid progress with these programs (and others), the company's shares could recover. Lastly, Pfizer continues to increase its dividend, which is up 51.3% over the past 10 years. The stock may not have performed well over the last half-decade, but it could handsomely reward patient investors who stick with it for the long term.
Between these two stocks, I would give Bristol Myers a slight edge right now, as its newer product portfolio looks better than Pfizer's. Bristol Myers also seems more prepared to overcome upcoming patent cliffs, especially that of Opdivo, thanks to the newer version of the drug. Further, Bristol Myers has grown its dividend faster over the past decade. Overall, it looks like a better income stock. However, those on the market for attractive, blue chip dividend stocks cannot go wrong with either company.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Both companies are dividend traps disguised as high-yield opportunities if their pipeline bets don't materialize on schedule."
The article frames this as a dividend-yield comparison, but both companies face genuine patent cliff risk that dividend sustainability hinges on. BMY's 4.4% yield and PFE's 6.6% look attractive in isolation, but PFE's higher yield is a red flag—it suggests the market prices in lower confidence in earnings durability. The article credits BMY's subcutaneous Opdivo formulation as a differentiator, but doesn't quantify expected market share retention post-biosimilar entry. Both firms are betting on pipeline depth, yet neither has demonstrated consistent late-stage success. The real risk: if either misses on next-gen launches (milvexian, MET-097i, PF4404), dividend cuts follow within 2-3 years, wiping out yield-chasing investors.
If biosimilar erosion accelerates faster than historical precedent—or if regulatory pathways shorten—even BMY's newer formulations won't prevent double-digit revenue declines in core franchises, making both dividends unsustainable regardless of pipeline promise.
"Patent-cliff mitigation claims rest on unproven pipeline assets whose failure odds are materially underweighted."
The article positions BMY ahead of PFE on dividend safety due to its subcutaneous Opdivo and milvexian pipeline offsetting 2030 patent losses on Opdivo and Eliquis. Yet both companies' high yields (4.4% and 6.6%) reflect market pricing of execution risk rather than strength. Neither has disclosed Phase 3 timelines or probability-weighted NPV for key assets like MET-097i or PF'4404, leaving investors exposed to binary clinical failures. Historical big-pharma success rates on late-stage oncology and metabolic programs sit below 50%, a factor the piece largely omits.
If milvexian and Abrysvo both hit, BMY's dividend growth edge could reverse quickly given PFE's larger absolute cash flow from Comirnaty tailwinds.
"The high dividend yields are currently a function of depressed share prices reflecting structural revenue loss rather than a signal of underlying financial strength."
The article frames this as a dividend safety contest, but it ignores the fundamental risk of capital erosion. BMY and PFE are essentially 'value traps' currently trading at depressed forward P/E multiples (often sub-8x) because the market correctly prices in the massive revenue holes from the 2026-2028 patent cliffs. While BMY’s subcutaneous Opdivo strategy is clever for lifecycle management, it is a defensive maneuver, not growth. PFE’s reliance on speculative pipeline assets like MET-097i is high-risk. Investors chasing these yields are effectively harvesting 'dividend yield' while suffering from long-term share price decay. Unless these firms demonstrate genuine M&A-driven inorganic growth, their dividend sustainability remains questionable.
If BMY or PFE successfully execute a major bolt-on acquisition using their cash flows, they could bridge the patent cliff gap faster than the market currently discounts, leading to a significant multiple re-rating.
"Bristol Myers Squibb offers a more resilient, yield-enhanced path through the patent cliff era thanks to a renewed Opdivo profile and pipeline upside, making it the superior yield-based pick among the two."
Headline yields look attractive, but the real test is cash flow durability as patents expire. BMY’s Opdivo retooling and milvexian potential could cushion a biosimilar onslaught, yet success hinges on regulatory and uptake milestones. Pfizer’s Abrysvo and a broader pipeline may offer steadier growth even if Ibrance and Eliquis face biosimilars, and its higher yield might attract risk-tolerant buyers. The piece glosses over the durability of these cash flows, balance-sheet discipline, and the timing/probability of pipeline milestones, which are the true drivers of dividend sustainability in a late-stage patent cliff cycle.
The strongest counter is that Pfizer’s larger, more diversified portfolio and faster-to-market vaccines could deliver more reliable cash flows, making the dividend safety case stronger for PFE than the article implies.
"BMY's low multiple reflects known patent cliffs, not hidden decay—but dividend safety still hinges on unquantified biosimilar market-share retention rates."
Gemini nails the capital erosion risk, but undersells BMY's defensive positioning. A 4.4% yield on a stock trading sub-8x forward P/E isn't a value trap if cash flows remain stable through 2028—it's rational pricing of *known* cliff risk. The real question: does BMY's subcutaneous Opdivo retain 60%+ of current volume post-biosimilar, or 30%? That 30-point swing determines whether the dividend survives intact. Nobody's quantified that retention curve yet.
"Opdivo retention alone cannot offset Eliquis losses, amplifying value trap risks for both stocks."
Claude's Opdivo retention question ignores Eliquis cliff timing in 2026, where even strong subcutaneous uptake fails to protect dividends if generics capture 70% share. This links directly to Gemini's capital erosion thesis: both firms risk multiple compression if pipelines like milvexian and MET-097i show the sub-50% success rates Grok cited. No one models the joint FCF impact.
"The market is ignoring that financing the necessary M&A to survive the patent cliff will likely force dividend cuts due to increased debt-servicing costs."
Grok and Claude are fixated on drug-specific retention, but both ignore the balance sheet leverage required to bridge the post-2026 revenue gap. If BMY or PFE lever up for M&A to offset the cliff, dividend coverage ratios will face immediate pressure regardless of Opdivo or Eliquis retention. We are debating product lifecycles while ignoring the cost of capital; if interest rates stay 'higher for longer,' the debt-servicing costs for necessary inorganic growth will cannibalize the very dividends investors are chasing.
"Dividend safety hinges on capital allocation and leverage management, not just Opdivo retention."
Grok's 70% vs 30% Opdivo retention frame misses timing and the broader cash-flow mix. Even with weaker Opdivo retention, Eliquis and vaccines could blunt near-term dividend risk, but the real hinge is capital allocation under higher-for-longer rates. If management cannot deleverage or monetize non-core assets, debt service will erode FCF and threaten dividend safety long before pipeline milestones matter. Timing and optionality > static retention assumptions.
The panel consensus is bearish, with the key risk being the patent cliff and the potential failure of late-stage pipeline drugs, which could lead to dividend cuts within 2-3 years. The key opportunity, if any, is Bristol Myers Squibb's (BMY) subcutaneous Opdivo formulation, which could retain a significant portion of its current volume post-biosimilar entry, potentially salvaging its dividend.
BMY's subcutaneous Opdivo formulation retaining market share
Failure of late-stage pipeline drugs leading to dividend cuts