While the pre-holiday season isn't usually a busy time for dividend raises, investors can usually expect a few companies to end the year on a high note by declaring one.
Sure enough, in the fading weeks of 2025, we've seen a smattering of payout hikes. Two of the more notable dividend raises were declared by healthcare sector mainstays Bristol Myers Squibb (BMY 1.57%) and Zoetis (ZTS 1.71%). Let's take a brief, flyover look at both.
Bristol Myers Squibb has a long dividend-paying history
Storied pharmaceutical company Bristol Myers Squibb has a long history of paying dividends; it has done so for 94 consecutive years. It's also declared dividend raises for 17 years in a row, most lately with its mid-December declaration of an upcoming $0.63-per-share quarterly payout. That's a 1.6% increase.
Image source: Getty Images.
Bristol Myers Squibb focuses on developing and selling drugs in the therapeutic areas of cardiovascular disease, immune disorders, and oncology. It divides its commercialized drug portfolio into "growth" medications with at least several years of patent exclusivity remaining, and "legacy" products that are either approaching the patent cliff or have already lost exclusivity.
The company has blockbuster drugs in both categories; the growth portfolio is anchored by cancer treatment Opdivo, and legacy's top seller these days is the blood-thinner medication Eliquis (codeveloped and marketed with fellow pharmaceutical major Pfizer).
True to its name, the growth portfolio has been the motor for top-line improvement lately. In the third quarter, sales of drugs in that category increased by 18% year over year to $6.9 billion. This was fortunate because it offset the 12% drop in legacy revenue, and helped boost overall revenue by 3% to $12.2 billion.
BMS has been profitable lately and at comfortable margins. Even though non-GAAP (adjusted) net income fell during the period by nearly 11%, it still landed well in the black, at $3.3 billion.
For pharmaceutical companies, a large and robust portfolio typically means strong free cash flow (FCF), and Bristol Myers Squibb generates considerable amounts of it. Annual FCF tends to land in the low-11-figure range; in the third quarter, this was over $5.9 billion, far more than enough to fund the nearly $1.3 billion paid out in dividends.
To me, Bristol Myers Squibb is an excellent choice for a reliable pharmaceutical company that pays a compelling dividend. Yield approaches 5% these days, putting it well above that of most healthcare companies and of many dividend-paying companies, period.
The company's next distribution will be paid on Feb. 2, 2026, to investors of record as of Jan. 2. At the most recent closing share price, it would yield 4.8%.
NYSE: BMY
Key Data Points
2. Zoetis
Zoetis is a different animal (pun intended) than Bristol Myers Squibb. Yes, it's also a pharmaceutical company, but one that's entirely focused on animal health. It's the largest such pure-play animal health drugmaker worldwide, with an estimated market share of around 20%.
The company is also a steady and reliable dividend payer, having distributed a dividend in every quarter since being spun out of busy Pfizer in 2013. Earlier this month, it pulled the lever on its latest dividend raise, hiking the quarterly distribution by 6% to $0.53 per share.
One great advantage of being a drug developer focused on animals rather than humans is that the business is smaller and more insular. Only a few specialty medicine makers exist at the top of this food chain, and happily, Zoetis is the leader of the pack.
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This makes for a very healthy and growing business, especially since pet ownership in the U.S. has increased significantly -- 66% of American households owned a pet, per a 2023-2024 survey from the American Pet Products Association, up notably from 56% in 1988. Roughly two-thirds of Zoetis' sales come from medications for pets (the remainder comes from products for livestock animals).
Over the past five years, annual revenue has increased steadily, advancing from $6.7 billion in 2020 to just under $9.3 billion only four years later. Net income also improved sequentially over that stretch, from over $1.6 billion in the former year to almost $2.5 billion in 2024.
NYSE: ZTS
Key Data Points
Zoetis should continue to post top- and bottom-line growth on the back of that trend in pet ownership. A rising global population will also boost demand for animal protein, which in turn will support a rise in the company's livestock business. Meanwhile, its pipeline is extensive and diverse, and it devotes considerable resources to developing new medications.
In my view, Zoetis is a standout niche company in the pharmaceutical sector, and with those strong fundamentals, it's certainly worthy of inclusion in any stock portfolio.
Zoetis' upcoming payout will be dispensed on March 3, 2026, to stockholders of record as of Jan. 20. It yields an estimated 1.8%.
