Bristol Myers Squibb’s Dividend Sustainability Hinges on One Critical Cash Flow Metric
Bristol Myers Squibb has raised its dividend for 17 straight years, but a looming patent cliff on its biggest cash generator puts that streak on a collision course with reality in 2027.
Bristol Myers Squibb (NYSE:BMY | BMY Price Prediction) pays an annualized forward dividend of $2.52 per share against a stock price of $63.65, with shares up 21.96% year to date. The number that decides whether that payout lasts the coming patent cliff is free cash flow coverage of the dividend: the cash the business generates after capital spending, compared with what it sends to shareholders.
Why Cash Coverage Beats Reported Earnings Here
Bristol’s reported earnings swing hard with acquisition charges. Net income was a loss of $8.948 billion in 2024 and a profit of $7.054 billion in 2025 on nearly identical revenue of $48.3 billion and $48.195 billion. Dividends are paid in cash, so cash is the measure.
That matters because of loss of exclusivity (LOE). When a drug’s patent protection ends, generic copies arrive, prices fall, and the brand’s cash flow can shrink sharply within months. Bristol is living through it now. Revlimid sales fell 63% in Q1 2026 after generic lenalidomide stopped being volume-limited on Jan 31, 2026, and generic pomalidomide entered the U.S. in March 2026. The Legacy Portfolio is guided to decline 12%-16% this year.
Where Coverage Stands Right Now
In 2025, operating cash flow was $14.156 billion, capital expenditures were $1.311 billion, and dividends totaled $5.045 billion. Cash from operations net of capex comfortably cleared the dividend bill.
Quarterly results are lumpier. Q1 2026 operating cash flow of $1.104 billion fell short of the $1.283 billion dividend. Q2 rebounded to $3.393 billion against $305 million of capex and $1.287 billion in dividends. Bristol also repaid $1.2 billion of debt in Q2 and held about $11.5 billion in cash and marketable securities, though net debt sits near $33.6 billion. Management says its balance sheet provides “the optionality and flexibility to continue investing in growth drivers, pursuing business development opportunities and returning cash to shareholders.”
Eliquis Is the Swing Factor for Cash
Eliquis generated about $4.5 billion in Q2, up 21%, and management now expects 2026 growth of “roughly 20 to 25%.” Then the math turns. European patent expiry arrives in mid Q4, management still expects a “$1.5 to $2 billion step down in 2027,” and Eliquis LOE hits in April 2028. Its intended successor, Milvexian, saw its atrial fibrillation results slip to the first quarter of 2027.
The offset is the Growth Portfolio, up 14% in Q2 and now “nearly 60% of total revenue,” led by Camzyos (+59%) and Breyanzi (+41%).
A Dividend Raise Cadence That Has Slowed
The $0.63 quarterly rate marks the 17th consecutive annual increase and 94th consecutive year of payments, but the latest raise was just 1.6%. The quarterly payout moved from $0.57 in 2023 to $0.60 in 2024, $0.62 in 2025 and $0.63 in 2026. Smaller increases point to a board preserving cash for the LOE gap.
Verdict: Coverage Holds for Now, 2027 Is the Test
Free cash flow coverage supports the payout today. Two risks could break it. A 2027 Eliquis step-down coupled with a failed or delayed Milvexian result would push annual operating cash flow net of capex toward the roughly $5.045 billion dividend bill. Two checks settle it. First, whether the December declaration (last year’s came 2025-12-10) lifts the quarterly rate above $0.63, and second, whether full-year 2026 operating cash flow minus capex again clears total dividends paid.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
