Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Bristol Myers Squibb Adds $2 Billion to Share Repurchase Program

By Eric Volkman - Jan 11, 2021 at 4:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's total authorization now stands at around $6.4 billion.

Bristol Myers Squibb ( BMY 2.46% ) has upsized its stock buyback program by 45%. The company announced on Monday that its board of directors has authorized an additional $2 billion in such repurchases. This brings the total amount authorized under the initiative to roughly $6.4 billion.

As is typical with such announcements, Bristol Myers added a caveat: "The timing and amount of any share repurchases under the authorization will be determined by management at its discretion and based on market conditions and other considerations." It also cautioned that the program could be canceled or suspended at any time.

Healthcare worker holding dollar sign paperweight.

Image source: Getty Images.

In recent years, Bristol Myers has hardly been shy about supporting its share price with buybacks. In 2019, for example, it spent $7.3 billion on repurchasing its stock.

What helps is that the company has seen dramatic improvements in its free cash flow (FCF). In that year, FCF grew by almost 45% on a year-over-year basis. Such growth is not only helping the company fund its stock buybacks, but also supporting a quarterly dividend that gets a modest lift every year. Since early 2014, that payout has risen steadily from $0.36 per share to the current $0.49.

Some consider Bristol Myers to be a bargain stock due to its low valuations and its current product lineup, which includes several blockbuster drugs.

Perhaps with that in mind, investors were clearly impressed by Bristol Myers' new commitment to share buybacks. The stock closed up by almost 4% on Monday, in contrast to the 0.7% decline of the S&P 500 index.

 
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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
BMY
$54.95 (2.46%) $1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.