A volatile trading environment and high inflation should not deter investors from the stock market. These challenges will eventually subside, and equities have performed well over the long term despite similar headwinds. The secret to earning strong returns is still the same: Invest in companies with robust underlying operations that can perform well over long periods.
Looking toward dividend payers is a particularly good idea, because companies that consistently increase their payouts tend to have resilient businesses. With that as a backdrop, let's consider two solid dividend stocks to invest in right now: Bristol Myers Squibb (BMY +2.36%) and Amgen (AMGN +0.11%).
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1. Bristol Myers Squibb
Bristol Myers Squibb's financial results haven't been great lately. Its third-quarter revenue of $12.2 billion was an increase of only 3% year over year. To make matters worse, the company will face important patent cliffs over the next few years. Cancer drug Opdivo and anticoagulant Eliquis, both of which are among its top-selling products, will lose patent exclusivity.
However, Bristol Myers looks well-equipped to weather the storm and emerge in one piece. It recently earned approval for a new, subcutaneous formulation of Opdivo, which will help mitigate the losses when the older version starts facing biosimilar competition.
NYSE: BMY
Key Data Points
The drugmaker has also worked hard to develop and launch new products in recent years, some of which are making a material impact on its financial results. Newer products like cancer drugs Opdualag and Breyanzi, as well as Camzyos, which treats heart disease, are all on pace to generate close to or more than $1 billion in sales this year.
And Bristol Myers should earn plenty more brand-new approvals. One of its more promising candidates is pumitamig, a cancer drug it's developing with BioNTech. The medicine has recently performed well in phase 2 studies for breast cancer, and could go on to challenge Keytruda, the world's best-selling cancer medicine, in certain markets. Additionally, Bristol Myers has a robust pipeline with plenty of active programs. The company's outlook for the next decade remains strong, as it continues to find ways to navigate the upcoming patent cliffs.
Meanwhile, the stock recently traded at 8.4 times forward earnings, which is much lower than the 17.8 average for the healthcare sector. It also now offers a forward dividend yield of 4.8%, and the company has increased its payouts by 63% in the past decade. Bristol Myers Squibb is worth serious consideration for long-term dividend investors, especially at current levels.
2. Amgen
Amgen has performed well this year, driven by strong financial results. In the third quarter, revenue increased by 12% year over year to $9.6 billion. Although Amgen has now lost patent exclusivity for denosumab, a medicine for bone health sold under the brand names Prolia and Xgeva, the company's outlook remains strong.
Its diversified lineup boasts plenty of other growth drivers that will help it mitigate denosumab-related declines -- in the third quarter, 16 of its products recorded at least double-digit sales growth. Those drivers include Amgen's own biosimilar business. It launched Pavblu, a competitor to Regeneron Pharmaceuticals' Eylea, late last year; it's performing well, recording $213 million in sales during the recent quarter. Other growth drivers include Tezspire, a medication for asthma, and Tepezza, which treats thyroid eye disease.
NASDAQ: AMGN
Key Data Points
Of course, Amgen also has an attractive pipeline. It recently initiated six phase 3 studies for MariTide, a promising GLP-1 product. MariTide could rack up $3.7 billion in revenue by 2030, per some analyst projections. The biotech's prospects seem strong as it rides its long list of growth drivers and launches new products such as MariTide and bemarituzumab, which recently successfully completed a phase 3 study in gastric cancer.
Shares are still attractive at 14.3 times forward earnings. And their forward yield now tops 3.1%, while the company has increased its payouts every year since initiating a dividend in 2011. I see Amgen as another strong income stock to buy and hold for the long term.
