The times they are a-changin' for two big drugmakers. Pfizer (NYSE:PFE) will look like a much different company within a few months as it spins off Upjohn and merges the unit with MylanBristol Myers Squibb (NYSE:BMY) is still integrating Celgene after acquiring the biotech in November.

Both Pfizer and BMS have seen their stocks plunge close to 30% this year then make strong rebounds. Which big pharma stock is now the better pick for long-term investors? Here's how Pfizer and Bristol Myers Squibb compare.

Two scientists in a lab standing side by side

Image source: Getty Images.

The case for Pfizer

Let's focus on the "new" Pfizer that will emerge after the Upjohn-Mylan transaction closes later this year instead of the "old" Pfizer. This "new" Pfizer should be a solid growth machine.

Pfizer reported a year-over-year sales decline of 8% in the first quarter of 2020. But that sales decline turns into a nice 12% increase if we only look at products that will be part of the company after it says goodbye to Upjohn. Those products include blood thinner Eliquis (which Pfizer co-markets with BMS), breast cancer drug Ibrance, kidney cancer drug Inlyta, rare disease drug Vyndaquel, and prostate cancer drug Xtandi. 

Sales should continue to grow for all of these drugs well into the future. In addition, Pfizer has several newer products that could be big winners over time. You can put melanoma drugs Braftovi and Mektovi, both of which were picked up with Pfizer's acquisition of Array Pharma, high on that list.

More promising new drugs could be on the way. Pfizer hopes to win FDA approval for tanezumab in treating chronic osteoarthritis pain before the end of this year. It expects to bolster its biosimilar lineup with PF-06881894, a biosimilar to Amgen's neutropenia drug Neulasta. Pfizer's pipeline also includes over 20 programs, with eczema drug abrocitinib and pneumococcal vaccine PF-06482077 especially standing out. 

With its strong current lineup and pipeline, it's understandable that Pfizer's management team is optimistic about the future. CFO Frank D'Amelio said recently that the company should be able to deliver revenue and adjusted earnings growth that will put it "among the industry leaders" after the Upjohn-Mylan deal wraps up.

There's a big question, though: What about the dividend? The good news is that Pfizer's dividend is likely to decline by only around 12% from its current level after it spins off Upjohn, which would put the yield at around 3.6%. Even better, current shareholders will also own stock in Viatris, the new company resulting from the merger of Upjohn and Mylan. Viatris will also pay a dividend that, in combination with the "new" Pfizer's dividend, should be roughly at the same level as Pfizer's current dividend.

The case for Bristol Myers Squibb

Bristol Myers Squibb doesn't have to wait to become a growth machine. The company's revenue skyrocketed 82% year over year in the first quarter with its adjusted earnings soaring 56%.

The biggest key to Bristol Myers Squibb's success in Q1 was its acquisition of Celgene. Sales for drugs that Celgene brought to the table accounted for more than two-thirds of BMS' Q1 revenue growth. Blood cancer drugs Revlimid and Pomalyst delivered over $3.6 billion in sales in the quarter. 

But BMS already had plenty of firepower in its lineup before the Celgene deal. Eliquis continues to shine, generating 37% sales growth in Q1. Immunology drug Orencia, leukemia drug Sprycel, and multiple myeloma drug Empliciti are other products in the company's stable that are generating strong growth.

Cancer immunotherapy Opdivo isn't performing as well as it has in the past. That could change, though, as it picks up additional approved indications as a monotherapy and in combination with other drugs. Thanks to the Celgene buyout, BMS also has new products that hold blockbuster potential with multiple sclerosis drug Zeposia and Reblozyl, which treats anemia related to beta-thalassemia and myelodysplastic syndromes.

BMS' pipeline includes more than 50 late-stage programs. Notable new drug candidates are ide-cel and liso-cel, both of which are cell therapies picked up in the Celgene acquisition. However, BMS recently received a refusal to file letter from the FDA for its application for approval of ide-cel. The company plans to refile by July.

The drugmaker's dividend isn't quite as attractive as Pfizer's, but it's still solid. BMS' dividend currently yields close to 2.9%. The company increased its dividend payout by nearly 10% in December.

Better buy

I like both of these stocks and own both of them. If I had to pick just one, though, it would be Bristol Myers Squibb.

My view is that BMS' growth prospects are stronger than Pfizer's. Even with the delay for ide-cel, I expect both it and liso-cel will win FDA approval. I look for both cell therapies and Zeposia to become blockbuster successes for the company. With these new additions to an already strong lineup combined with a growing dividend, Bristol Myers Squibb should deliver market-beating total returns over the next decade.