BMY vs WST: Dividend Comparison
Dividend data as of
Bristol Myers Squibb Co (BMY) and West Pharmaceutical Services Inc (WST) are both in the Health Care sector, making them natural rivals for dividend investors. BMY offers a significantly higher 4.09% yield compared to WST's 0.34%, a gap of 3.75%. Both stocks show similar dividend growth rates, each around 14.0% over the past five years. WST holds the edge in dividend safety with a "Safe" rating.
Verdict
Yield Analysis
BMY yields 3.75% more than WST. In dollar terms, BMY pays $2.49/share vs WST's $0.84/share annually.
Dividend Growth
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%.
WST: Dividend growth is accelerating — the 3-year CAGR of 21.1% exceeds the 5-year rate of 13.1% and the 10-year rate of 9.7%.
Dividend Safety
BMY: 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.
WST: The payout ratio of 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in BMY vs WST today?
At $60.77 per share, $10,000 buys about 164.5 shares of Bristol Myers Squibb Co (BMY). Each share pays $2.49 per year in dividends, so the position starts out generating roughly $410 per year — about $34 a month.
At $248.03 per share, $10,000 buys about 40.3 shares of West Pharmaceutical Services Inc (WST). Each share pays $0.84 per year in dividends, so the position starts out generating roughly $34 per year — about $3 a month.
BMY is the larger income stream from day one: $376 per year more on the same $10,000 invested.
What could $10,000 of BMY or WST income look like in 10 years?
Bristol Myers Squibb Co (BMY) has raised its dividend about 14.0% a year over the past five years. If that pace held, the $409 per year that $10,000 generates today at the current 4.09% yield would reach $1,513 per year by 2036 — a 15.1% yield on the original cost.
West Pharmaceutical Services Inc (WST) has raised its dividend about 13.1% a year over the past five years. If that pace held, the $34 per year that $10,000 generates today at the current 0.34% yield would reach $118 per year by 2036 — a 1.2% yield on the original cost.
On those trailing rates, BMY pays more in 2036: $1,513 versus $118 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would WST's dividend growth overtake BMY's higher yield?
It doesn't, on the trailing numbers. Bristol Myers Squibb Co (BMY) yields more today (4.09% vs 0.34%) and has also grown its dividend at least as fast (14.0% vs 13.1% a year over five years). Unless WST accelerates its raises or BMY stumbles, WST never closes the income gap — BMY wins on both current income and growth.
Can BMY and WST afford their dividends?
Bristol Myers Squibb Co (BMY) earns $3.46 per share against $2.49 paid out in dividends — 1.4x coverage (a 72% payout ratio).
West Pharmaceutical Services Inc (WST) earns $6.75 per share against $0.84 paid out in dividends — 8.0x coverage (a 12% payout ratio).
WST's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for BMY if earnings weaken.
Which fits an early-retirement income portfolio better, BMY or WST?
For income you need right now, Bristol Myers Squibb Co (BMY) leads: $100,000 invested today pays about $341 a month at the current 4.09% yield, versus $29 a month from West Pharmaceutical Services Inc (WST) at 0.34%.
BMY also leads on dividend growth (14.0% vs 13.1% a year over five years), so the trailing numbers favor it on both fronts.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $2,259/yr in BMY vs $122/yr in WST by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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