We believe Bristol Myers Squibb stock (NYSE: BMY) is a better pick than its industry peer, Johnson & Johnson (NYSE: JNJ). J&J trades at a higher valuation of 4.4x trailing revenues, compared to 3.1x for BMS, and this valuation gap will likely narrow over the coming years in favor of BMS, in our view. While BMS has seen better revenue growth in recent years, J&J is more profitable and has a better financial position, as discussed below.
Looking at stock returns, BMY has fared slightly better with -5% returns this year vs. -10% returns for JNJ. However, both have underperformed the broader S&P500 index, up 8%. There is more to the comparison, and in the sections below, we discuss why we believe BMY stock will offer higher returns than JNJ stock in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Johnson & Johnson vs. Bristol Myers Squibb
BMY
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