BMY vs UNH: Dividend Yield, Growth & Safety Comparison
Bristol Myers Squibb Co (BMY) and Unitedhealth Group Inc (UNH) are both in the Health Care sector, making them natural rivals for dividend investors. BMY edges ahead on yield at 4.09% versus UNH's 3.20%. For dividend growth, BMY leads with a 5-year CAGR of 14.0% versus UNH's 11.7%. UNH holds the edge in dividend safety with a "Safe" rating. UNH is a Dividend Contender with 16 years of consecutive increases.
Key Metrics Comparison
| Metric | BMY | UNH |
|---|
| Dividend Yield | 4.09% | 3.20% |
| Annual Dividend | $2.49 | $8.73 |
| 5-Year CAGR | 14.0% | 11.7% |
| Payout Ratio | 72% | 45% |
| Consecutive Years | 0 | 16 |
| Price | $60.77 | $291.12 |
Yield Comparison
Bristol Myers Squibb Co (BMY) currently yields 4.09%, which is attractive for the broader market. That's 0.90% more than Unitedhealth Group Inc (UNH), which yields 3.20%. In dollar terms, BMY pays $2.49/share annually versus UNH's $8.73/share.
Dividend Growth
Over the past five years, BMY has grown its dividend at a 14.0% CAGR compared to UNH's 11.7%. BMY: Dividend growth is accelerating — the 3-year CAGR of 20.4% exceeds the 5-year rate of 14.0% and the 10-year rate of 9.0%. UNH: Dividend growth is slowing — the 3-year CAGR of 9.4% trails the 5-year rate of 11.7% and the 10-year rate of 15.6%.
Dividend Safety
BMY's dividend safety is rated "Moderate." The payout ratio of 72% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. UNH's dividend safety is rated "Safe." The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x. UNH's payout ratio of 45% is more conservative than BMY's 72%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in BMY generates approximately $409/year in dividend income, compared to $320/year from UNH — a difference of $89/year. At $100,000, that gap widens to $890/year.
Verdict
- Best for income: BMY
- Best for growth: BMY
- Best for safety: UNH
Frequently Asked Questions
Which has a higher dividend yield, BMY or UNH?
Bristol Myers Squibb Co (BMY) has a higher dividend yield of 4.09% compared to Unitedhealth Group Inc (UNH) at 3.20%.
Is BMY or UNH a better dividend growth stock?
Bristol Myers Squibb Co has the stronger dividend growth with a 5-year CAGR of 14.0%, compared to Unitedhealth Group Inc's 11.7%.
Which is safer for dividend income, BMY or UNH?
Bristol Myers Squibb Co's dividend safety is rated "Moderate" while Unitedhealth Group Inc is rated "Safe." The payout ratio of 72% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
How much income does $10,000 in BMY vs UNH generate?
A $10,000 investment in BMY generates approximately $409/year in dividends, while the same amount in UNH generates about $320/year.
Is BMY or UNH a Dividend Aristocrat?
Unitedhealth Group Inc is a Dividend Contender with 16 consecutive years of increases. Bristol Myers Squibb Co does not currently qualify for aristocrat status.
Which has a lower payout ratio, BMY or UNH?
Unitedhealth Group Inc has a lower payout ratio of 45% compared to Bristol Myers Squibb Co's 72%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BMY vs UNH: which is better for retirement income?
It depends on your priorities. BMY for current income, BMY for dividend growth, UNH for safety. Many retirement investors hold both for diversification.
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