Pharmaceutical giant Bristol Myers Squibb (NYSE: BMY) is offering investors a 4.5% yield. That is well above the 1% you’d collect from the S&P 500 index (SNPINDEX: ^GSPC ) and the 1.6% average for the drug sector. While the yield looks relatively attractive, given how high it is, prudent investors will wonder if the dividend is safe. It’s highly likely that it is, and here’s why.
Bristol Myers Squibb is a well-run business
Bristol Myers Squibb isn’t an upstart drug company; it has been in business for a very long time and is highly respected. Notably, its dividend hasn’t been increased every year, but it has trended higher for decades. That’s an indication of the company’s strength as a business and of the board of directors’ understanding of the dividend’s value to shareholders.
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