Cheap isn't a description that you can apply to many stocks right now. The stock market is sizzling hot. Valuations are looking pretty frothy even for many bullish investors. 

That doesn't mean, though, that there aren't any bargains to be found. You can even find inexpensive stocks that pay you to own them. I'm referring, of course, to dividend stocks. What's my favorite dirt cheap dividend stock right now? I'd go with Bristol Myers Squibb (NYSE:BMY).

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Sterling credentials

Let me first establish Bristol Myers Squibb as a bona fide dirt cheap dividend stock. I suspect you'll agree that it has sterling credentials.

BMS' shares trade at a little over eight times expected earnings. How cheap is that? Consider that the S&P 500's forward earnings multiple stands above 22. BMS' valuation is lower than any of its big pharma peers. It's also well under the company's historical levels.

Granted, the stock doesn't look like a bargain looking backward. BMS' trailing-12-month price-to-earnings ratio of nearly 94 is sky-high. However, that number is heavily skewed by the company's amortization of acquired intangible assets that spread out the costs related to some acquisitions.

It's easy to certify Bristol Myers Squibb as a card-carrying dividend stock. The company has paid a dividend every year for decades. BMS has increased its dividend in each of the last 11 years. And its dividend currently yields an attractive 3.2%. 

What I really like

I'll admit that I like Bristol Myers Squibb's valuation and dividend. But there's something else that I like a lot more: Its growth prospects.

The company already has multiple growth drivers in its lineup. Sales continue to soar for blood thinner Eliquis, autoimmune disease drug Orencia, and cancer immunotherapy Yervoy. BMS' acquisition of Celgene last year brought other blockbuster winners into the fold, notably including blood cancer drugs Revlimid and Pomalyst/Imnovid.

That Celgene deal also gave BMS several rising stars. Zeposia has already won U.S. Food and Drug Administration (FDA) approval for treating multiple sclerosis. Reblozyl is picking up momentum as a treatment for anemia in patients with rare blood disorders beta-thalassemia and myelodysplastic syndromes. 

I'm especially excited, though, about BMS' pipeline. The company hopes to obtain additional approved indications for several drugs already on the market, including cancer immunotherapy Opdivo and Zeposia. Probably one of the most important FDA decisions on the way this year will come in March with a potential approval for ide-cel in treating multiple myeloma.

BMS also acquired MyoKardia in November for $13.1 billion. This buyout gives the company a promising cardiovascular drug candidate, mavacamten. BMS plans to file for FDA approval of the drug in treating obstructive hypertrophic cardiomyopathy, a type of chronic heart disease, in the first quarter of 2021. 

Wall Street analysts project that the company will be able to generate average annual earnings growth of more than 21% over the next five years. With its strong current lineup and a loaded pipeline, I think that target is quite attainable. 

Risks

There are risks with any stock, and Bristol Myers Squibb is certainly no exception. The biggest risk that the company faces is the possibility that it won't be able to win the regulatory approvals that it's counting on. Much of the projected growth for BMS hinges on securing approvals for new drugs and additional indications for existing drugs.

In addition, generic rivals for Revlimid will enter the U.S. market beginning in 2022. Initially, these generics will only be allowed to be sold in limited volumes based on deals that Celgene and later BMS struck with the companies making the generic versions. However, it's likely that sales for Revlimid will decline somewhat. 

While these risks are real, they don't diminish my view of Bristol Myers Squibb. It's without question a dirt cheap dividend stock. But it's also an attractive growth stock. That's a combination that's hard to beat.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.