What's better than purchasing shares of a strong dividend-paying company? Answer: Purchasing shares of a strong dividend-paying company trading at a bargain. Although today's market looks overvalued, reasonably priced options do exist for income-oriented investors. Two that fit the bill are pharma giants Bristol Myers Squibb (NYSE:BMY) and Pfizer (NYSE:PFE).

The former boasts a forward price to earnings ratio of 9.0. Meanwhile, Pfizer's forward P/E stands at 11.0. For reference, the forward P/E for the pharmaceuticals industry was 14.3 as of July 19. And these two companies have more to offer dividend-seeking investors than just their relatively attractive valuation figures. Let's see why both would be a fine addition to a dividend portfolio. 

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1. Bristol Myers Squibb

There aren't that many pharma giants that boast a lineup of drugs comparable to that of Bristol Myers, at least in terms of revenue-generating potential. The company has over half a dozen products that rack up more than $1 billion per year. Of these, many will continue to be major growth drivers.

For instance, Bristol Myers' Opdivo -- a cancer medicine -- and anticoagulant Eliquis (the rights of which Bristol Myers shares with Pfizer) will both be among the top five best-selling drugs in the world by 2026, according to the research company Evaluate Pharma. And both will see their revenue increase at a compound annual growth rate (CAGR) of 6.8% between now and then.

In the first quarter, ended March 31, Bristol Myers' sales of Eliquis grew by 9% year over year to $2.9 billion. While revenue from Opdivo has been declining due in part to increased competition (it dropped by 3% to $1.72 billion in the first quarter), the company expects sales of this cancer drug to start growing again this year thanks to new indications.

For instance, Opdivo was approved as a combination treatment (with Exelixis' Cabometyx) for patients with advanced renal cell carcinoma in April. Thanks to these two drugs (and others), Bristol Myers will remain among the top 10 pharmaceutical companies by worldwide medicine sales for the foreseeable future.

And the drugmaker can also count on a rich pipeline with dozens of clinical programs. The company had seven new regulatory approvals between January and April. Bristol Myers is well positioned to continue generating growing revenue and profits, which matters a great deal if it is to continue rewarding shareholders with dividend increases.

Bristol Myers' dividend yield of 2.85% compares favorably to the S&P 500's 1.35%, and it boasts a very modest 31.6% cash payout ratio, giving it plenty of room for future dividend increases. All these factors make the pharma company an excellent dividend stock to buy today. 

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2. Pfizer 

Despite its huge success in the coronavirus vaccine market, Pfizer remains reasonably valued. This bodes well for investors, particularly income-seeking ones, as there are good reasons to think the healthcare company is in a good position to perform well from here on out. For one, Pfizer went through a bit of a metamorphosis over the past couple of years.

In August 2019, the company spun off its consumer healthcare business, which combined with GlaxoSmithKline's competing business to form a joint over-the-counter consumer healthcare unit. Pfizer also shed its off-patent medicine unit to the company formerly known as Mylan. The new entity, called Viatris, started trading on the market on Nov. 17, 2020.

Why did Pfizer go through these changes? These two businesses were harming the drugmaker's bottom line, and the company decided to focus on its more profitable biopharma business. It may be too early to say that Pfizer's strategy has been a smashing success, but things certainly look good so far. 

In the first quarter, the company's revenue -- not including sales of its COVID-19 vaccine BNT162b2 -- grew by 8% year over year to $11.1 billion. Pfizer's sales of $1.6 billion from Eliquis (a 26% increase compared to the year-ago period) and revenue of $538 million from rheumatoid arthritis drug Xeljanz (a 19% year over year increase) were two of the most important growth drivers. 

Of course, we can't ignore BNT162b2's revenue of $3.5 billion. Pfizer expects sales of $26 billion from the product this year. What's more, it will likely continue to make a dent on the company's top line in 2022 and beyond. Much like Bristol Myers, Pfizer's pipeline is impressive, with more than four dozen ongoing clinical trials, including more than 20 in phase 3 studies.

Even a handful of new approvals every year, which seems more than likely, will help the company add new sources of revenue. Pfizer's 3.82% dividend yield is attractive, and while its cash payout ratio of 65.9% seems a bit high, it isn't unreasonable. Growing revenue and earnings will allow the pharma giant to sustain its dividend payments even amid economic downturns.

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.