If you're looking for dividend stocks that offer both attractive yields and strong growth prospects, you might want to consider AbbVie (ABBV -0.68%) and Bristol Myers Squibb (BMY -0.65%). Both of these healthcare giants have impressive track records of rewarding shareholders with consistent dividend payments and increases, as well as robust pipelines of innovative drugs that could drive future earnings growth. Equally as important, both stocks trade at a substantial discount relative to their pharmaceutical peer group.

Here's why AbbVie and Bristol Myers Squibb screen as two undervalued dividend stocks to buy now.

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AbbVie: A diversified biopharma powerhouse

AbbVie is the fifth largest biopharma by market capitalization. Although the company is best known for its immunology franchise, spearheaded by the multi-indication juggernaut Humira, AbbVie also sports top-shelf products in several other high-growth areas such as oncology, neuroscience, eye care, virology, and aesthetics. To wit, AbbVie is home to a number of blockbuster drugs like medical aesthetics therapy Botox and blood cancer treatment Imbruvica. 

On the dividend side of the ledger, the drugmaker is beloved by income investors for both its lengthy track record of dividend increases and its above-average yield. Speaking to the first point, AbbVie has raised its dividend for an impressive 51 consecutive years, landing it on the esteemed Dividend King list. In yield terms, AbbVie's annualized payout presently stands at approximately 4%, which is among the highest yields within its large-cap biopharma peer group. 

AbbVie stock does have some important risk factors to consider, however. Most importantly, the company's flagship drug Humira lost patent protection inside the U.S. this year and it has been facing biosimilar competition in Europe since 2018. Most of the downside risk emanating from this key patent expiry, though, might be already baked into the drugmaker's stock price. AbbVie's shares, after all, trade at an attractive 13.6 times projected earnings. By comparison, the average forward-looking price-to-earnings ratio within its peer group is 15.1 at the time of this writing.

Bristol Myers Squibb: A leader in oncology and immunology

Bristol Myers Squibb, or BMS for short, is another biopharmaceutical giant that specializes in developing and marketing treatments for cancer, cardiovascular diseases, immunological disorders, and fibrosis. The company has a portfolio of blockbuster drugs that generate billions of dollars in annual sales, such as lood thinner Eliquis, immunotherapy Opdivo, and rheumatoid arthritis drug Orencia.

BMS has paid a dividend for 91 straight years, it has raised its payout for 14 consecutive years, and it offers an extremely generous yield of 3.75% at current levels. The company's reasonable 59.8% trailing payout ratio implies that it can comfortably support additional hikes to the dividend. Equally as important, BMS stock is also attractively priced relative to its peers, with the drugmaker's shares trading at only 7.7 times forward earnings. 

All told, BMS stock offers an attractive dividend yield at a bargain basement price. Now, the international pharma giant is facing some major patent expires in the years ahead, but its broad clinical pipeline and external investments in innovation should allow it to keep posting respectable levels of top- and bottom-line growth in the back half of the decade.