Bristol-Myers Squibb (NYSE: BMY) and Eli Lilly (NYSE: LLY) are shockingly similar companies. They're about the same size, and both face massive patent cliffs -- with Eli Lilly set to lose Zyprexa, Cymbalta, and others, and Bristol-Myers to lose Plavix, the second best selling drug behind Pfizer's (NYSE: PFE) Lipitor.

But, while I panned Eli Lilly earlier in the week, I think Bristol-Myers is a better buy for one major reason: its resources.

Company

Market Cap

Revenue

Cash and Short-Term Investments

Long-Term Investments

Total Investments

Bristol-Myers Squibb

$43.5

$19.3

$6.8

$3.0

$9.8

Eli Lilly

$38.9

$22.3

$4.8

$1.1

$5.9

Source: Capital IQ, a division of Standard & Poor's. All amounts in billions. 

You can do a lot with an extra $4 billion
Bristol-Myers built up it's nearly $10 billion nest egg by selling off its non-pharmaceutical assets and spinning off its baby formula business, Mead Johnson Nutrition (NYSE: MJN). Putting all its eggs in the drug-development business is risky, but it could pay off with substantially better returns compared to companies such as Pfizer (NYSE: PFE), Abbott Labs (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), all of which have taken a more diversified approach.

Now Bristol-Myers just needs to deploy some of that capital to help deaden the blow from the loss of Plavix. License a few drugs; maybe buy another development-stage drugmaker or two. There are a lot of options to stocking the pipeline when you have that much cash on hand. As long as Bristol-Myers Squibb doesn't buy a company large enough to justify adding another hyphen to its name, investors should be confident that the company has a chance at growing post-Plavix.

Putting money in management's hands
The downside to investing in Bristol-Myers is that you're essentially asking management to put your money to work. For each dollar you invest, nearly a quarter is just sitting there in short- and long-term investments, waiting to be deployed.

Not every drug Bristol-Myers licenses is going to be a success; it just gave back a drug to Exelixis (Nasdaq: EXEL) that it didn't think was worth paying to develop. But management needs to make good choices -- investing in drugs that are worth the risk -- in order to get enough hits to drive future revenue.

But let's face it: You're putting your investment in management's hands no matter what company you buy. Many aren't as dependent on external deals for growth, but management still has to execute in order for a company to prosper.

Willing to wait?
It's going to take a while. The company laid out its post-Plavix plan for investors earlier this year with earnings per share guidance for 2013 somewhere between last year's earnings and what Bristol-Myers is expecting to earn this year.

We may see the P/E increase a little from where it is now -- 11.4 times the middle of this year's expected earnings -- but not until investors are sure the bottom-line growth is on track. Without much total earnings growth expected over the next three years, capital appreciation may be hard to come by in the near term.

Fortunately there's a nice dividend that's paying you 5.1% of the share price to wait for a time when capital appreciation might be possible. The dividend is by no means guaranteed, but if Bristol-Myers invests its fortunes correctly, it should have enough cash flow to pay a dividend after Plavix falls from its pedestal.

With a 5% return, it would take a while to get to a 10-bagger, but in this market, slow and steady sure looks good. If the market falls further, the dividend yield should help Bristol-Myers keep from getting swept up with the crowd.