Buying shares of a generic drug manufacturer like Viatris (VTRS -0.09%) isn't the right move for everyone. While most investors would look for such companies to have a long history of bulletproof returns in all economic environments, this company is just at the start of its tenure as an independent entity, having resulted from a spinoff by Pfizer in 2020.

But that doesn't mean Viatris is a bad option, especially for investors who want both a dividend payment and perhaps a bit of share price growth. Let's take a look at three reasons why this stock is worth owning, and one reason why some people might be interested in selling it rather than buying.

1. It's aiming to return more capital to investors

One big reason to buy Viatris stock soon is to get the advantage of its generous shareholder rewards policies. It pays a dividend that currently yields 4.9%, which is fairly high. While dividend growth hasn't been significant since the company became an independent entity in 2021, with its payout rising by around 9%, it could pick up the pace as soon as there's more cash to go around.

For 2023, Viatris expects roughly $2.5 billion in free cash flow (FCF), so that time is likely coming. Plus, management is already aiming to return 40% more capital in 2023 than it did in 2022 via share buybacks, which it spent $250 million on in the first quarter.

Considering that it's planning to trim $1 billion of its costs before the close of 2023, the chances of Viatris having enough cash to distribute to shareholders while also reinvesting for growth are high. And that's bullish. 

2. The shares are valued quite inexpensively

Most of the time, the market doesn't expect generic drug manufacturers like Viatris to grow very quickly. That makes sense since they often have significant debt loads to pay for expansions of their manufacturing capabilities.

In this stock's case, its price-to-earnings (P/E) ratio is 6.2, making Viatris look dirt cheap given that the market's average P/E is 25. It also compares very favorably to that of competitors like Teva Pharmaceuticals, which featured a P/E of 24 back when it was profitable in Q1 2022. And with Viatris' costs set to decline further this year, it'll only look more undervalued. In fact, over the past three years, its quarterly cost of goods sold (COGS) fell as a proportion of quarterly revenue.

In other words, this company is selling for cheap, and its financial performance is improving -- but the market hasn't noticed yet.

3. Its debt load is starting to shrink

Though it currently has more than $18 billion in debt, Viatris is making swift strides to deleverage itself, and its efforts are paying off. In the fourth quarter of 2020, its debt load was $25 billion. In Q1 2023 alone, it repaid $546 million, making for total repayment of $6 billion over the last nine quarters.

Viatris plans to keep aggressively paying down its liabilities as part of its capital allocation strategy, slashing its burden of interest payments and leaving more money leftover at the end of every quarter. Once it's sufficiently deleveraged, Viatris can shift its focus to returning more capital to shareholders, and it'll also be in a better position to acquire promising pharmaceutical intellectual property (IP) or smaller biopharma businesses. 

Typically, paying off debt wouldn't constitute a reason to buy a stock in and of itself. But in Viatris' case, it's an example of how its management is able to make promises that it then keeps, which is invaluable -- and the extra financial flexibility from paying off debt will come in handy down the line, too. 

One reason to sell: It's not going to be growing its top line

There is one reason why you might want to think about selling Viatris stock, especially if you're looking for snappy growth in the near term. As older generic medicines become displaced by newer and more effective branded versions, Viatris' revenue is expected by Wall Street analysts and management alike to drop in 2023 compared to a year prior. Considering that it made $16.2 billion in 2022, management's guidance of $15.7 billion for the year isn't too bad of a decline. 

Still, it's important to remember that this isn't a growth stock aiming to tack on 20% to its top or bottom line each year. Generic medicine sellers make money by being highly efficient with their manufacturing and by gradually expanding their offerings of drugs when the opportunities for profitable expansion arise.

It ends up being a slow burn that's rewarding for investors who hold onto their shares the longest, as the gradual march of capital being returned adds up over time. If that bothers you or it's not what you thought you signed up for, selling is a good idea.