Dividend stocks are always a rock-solid choice as an investing vehicle. Companies that pay dividends are generally proven commodities in their respective fields, they typically have strong positive free cash flows, and these types of equities allow investors to take advantage of the power of compounding -- via dividend reinvestment plans -- to magnify returns over the long-term.

The one problem with dividend stocks is that most of these equities trade at sky-high premiums because of these built-in advantages over growth stocks. Because of the political turmoil over the drug pricing debate in the U.S., however, a handful of large cap pharmaceutical stocks are currently trading at extremely attractive valuations.

Which dividend-paying drug manufacturers are the best buys right now? Amgen (AMGN 2.29%) and Bristol Myers Squibb (BMY -0.38%) both sport dirt cheap valuations, healthy dividend yields, and intriguing growth prospects over the next 10 years. While both of these blue-chip pharma stocks have had an off year in terms of their share price performance in 2021, savvy investors might be wise to capitalize on this recent weakness. Here's a brief overview of the pros and cons associated with each of these top flight dividend-paying pharma stocks. 

A roll of U.S. currency and a note pad with the word dividend sitting on a desk.

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Amgen: A proven winner

Amgen's shares have dropped by nearly 7% so far this year at the time of writing. Investors have dumped this top biotech stock in 2021 mainly because of the pandemic's negative impacts on its business. Specifically, Amgen's management has cited the pandemic as the primary culprit behind the slower-than-expected ramp-up for its host of newer drugs. In effect, the pandemic has reportedly caused a dip in the volume of doctor's visits, leading to fewer new treatment regimens. But this headline grabbing tidbit is wholly misleading in regard to the performance of the biotech's business in 2021. 

Despite this global headwind, Amgen's top-line actually rose by a healthy 4% in Q3 of 2021, compared to the same period a year ago. Based on its share price performance this year, though, it wouldn't be unreasonable to think that the biotech's quarterly and annual revenues were headed in the wrong direction.

On the contrary, newer growth products like the lung cancer treatment Lumakras, the osteoporosis drug Prolia, the bad-cholesterol medication Repatha, and the biotech's biosimilar franchise have all been growing sales fast enough of late to offset declining revenues from ageing former stars like the white blood cell therapy Neulasta. What's more, Lumakras has the potential to become the biotech's new flagship medication from a commercial standpoint, which removes a key headwind from the biotech's long-term outlook. 

On the dividend side of things, Amgen boosted its annual dividend payout by a hefty 10% this year. Nonetheless, the biotech still has a healthy payout ratio of under 70%, implying that its dividend is more than sustainable over the long-term. Moreover, Amgen's stock presently yields a juicy 3.36% on an annualized basis, thanks to this recent annual dividend increase, combined with its declining share price in 2021. The biotech's stock is also currently trading at less than 12 times next year's earnings, which is well below its historical average.  

All told, Amgen offers investors an extremely attractive dividend program at a rock bottom valuation, which should appeal to bargain hunters who value reliable forms of passive income. 

Bristol: Buy the dip

Bristol's shares have sunk by 5.47% in 2021 and are currently trading close to their 52-week lows right now. Concerns over the pharma giant's upcoming battle with the patent cliff have scared away investors this year. Specifically, Bristol is staring down patent expirations for both the top-selling cancer drug Revlimid and its blockbuster, Pfizer-partnered blood thinner Eliquis, in the current decade. Making matters worse, the sales growth of the company's flagship immunotherapy drug, Opdivo, has started to slow down in a big way in recent quarters. So there are some solid reasons for investors -- especially defensive types -- to tread carefully with this drugmaker. 

There are several good reasons for conservative investors to buy this beaten-down dividend stock, however. First off, Bristol's stock is only trading at roughly 7 times forward-looking earnings at the moment, which is absurdly cheap for a marquee big pharma company. Second, the company is in the process of rolling out new growth products, such as the ulcerative colitis medication Zeposia, and it is rumored to be considering a bid for the potential blockbuster lupus nephritis drug, Lupkynis, marketed by Aurinia Pharmaceuticals. Bristol, in short, is actively preparing for life post market exclusivity for Eliquis and Revlimid. 

On the dividend front, Bristol's stock yields 3.36% on an annualized basis, which is above average for its peer group. Now, dividend investors might be worried about a possible reduction in the annual payout if the company goes on a spending spree to shore up its product portfolio. But with $16 billion in cash and marketable securities at the end of the most recent quarter, Bristol should have plenty of firepower to do value-creating business development deals, while continuing to feed its elite dividend program. 

All things considered, Bristol might not the absolute safest equity for passive income investors because of these patent headwinds. But the biopharma's shares are probably close to a bottom at this point, and there's no real reason to believe that a dividend reduction is in the cards anytime soon.