Bristol-Myers Squibb (BMY 0.81%) stock has underperformed the S&P 500 index so far this year. It's also trailed well behind most of its peers, but it could be worse. Earlier in 2018, Bristol-Myers Squibb (BMS) was down 17%; now the stock has climbed back to nearly where it started the year.

Is BMS a smart pick for investors to buy now? Here are the arguments for and against the big pharma stock.

Red pills forming question mark in pile of white pills

Image source: Getty Images.

Reasons to buy

Opdivo. If you're looking for the top reason to buy BMS stock, that's it. The company's cancer drug is on track to generate well over $6 billion in sales this year. Market research firm EvaluatePharma projects that Opdivo will be the No. 4 best-selling drug in the world by 2024 with sales of more than $11 billion.

Merck has stolen some of Opdivo's thunder with Keytruda's clinical success as a first-line treatment of lung cancer. However, Opdivo should still generate plenty of growth for BMS in the years to come, especially if it works well in combination with other therapies. 

Right now, however, Eliquis is Bristol-Myers Squibb's top-selling drug. The anticoagulant is also the company's fastest-growing blockbuster. EvaluatePharma thinks that Eliquis will rank just behind Opdivo among the world's top-selling drugs in 2024, with total sales topping $10.5 billion. BMS won't get all of that money, though, because it co-markets Eliquis with Pfizer (PFE -0.27%)

BMS also claims several other drugs that might not have the star power of Opdivo and Eliquis but still deliver blockbuster sales. Immunology drug Orencia continues to perform well. So does leukemia chemotherapy Sprycel. The company could also see improved sales for cancer immunotherapy Yervoy if combo studies with Opdivo are successful.

Another reason for investors to consider buying Bristol-Myers Squibb is the company's dividend, which currently yields 2.61%. Although there aren't likely to be big dividend hikes in the near future, BMS should be able to keep the dividends flowing thanks to its solid cash flow.

Reasons to stay away

Bristol-Myers Squibb's revenue growth is likely to continue to be held back to some degree by several of its older products. Sales are plunging for hepatitis B drug Baraclude, HIV drugs Sustiva and Reyataz, and the drugmaker's hepatitis C franchise. These drugs combined to generate nearly $2.9 billion last year, but they might not pull in half that amount in 2018.

The company's late-stage pipeline is also heavily dependent on Opdivo and other already-approved drugs. Although BMS still lists three new candidates in phase 3 testing on its website, the actual number is now down to two. The company canceled phase 3 testing of its IDO inhibitor in May following Incyte's major late-stage flop for its IDO inhibitor epacadostat

Investors expecting Bristol-Myers Squibb to be acquired probably shouldn't hold their breath. Rumors earlier this year that Pfizer could be interested in buying BMS were put to rest after Pfizer CEO Ian Read stated that no deal was in the works. Read seemed to be concerned that the valuation of BMS was too high. BMS isn't much cheaper now than it was then.

Final answer

Is Bristol-Myers Squibb stock a buy? I think the stock's positives outweigh the negatives.

Even with slipping sales for its older antiviral products, BMS should be able to deliver double-digit percentage annual earnings growth. Adding the company's respectable dividend yield to that kind of growth should translate to nice total returns for investors over the long run.

I don't view Bristol-Myers Squibb as the best stock on the market right now, though. There are even other healthcare stocks that I'd rate higher. But BMS is a solid choice with a bright future ahead for Opdivo and Eliquis.