With solid earnings, strong balance sheets, share buybacks, above-market dividend yields, and an emerging growth element we continue to recommend buying Big Pharma on dips, explains Yiannis Mostrous in Capitalist Times.

One of our favorites is Bristol-Myers Squibb (BMY). Its shares lost ground after the company reported that its second-quarter revenue fell 4% from year-ago levels, with its US sales dropping 7% and international sales slipping 1%.

Much of this decline stemmed from the pharmaceutical company’s disposal of its diabetes care business—a near-term headwind. Nevertheless, the company’s second-quarter earnings exceeded the Bloomberg consensus expectation, thanks to improving gross margins.

Bristol-Myers Squibb’s strong financial position has allowed management to rebuild the firm’s development pipeline and product portfolio through investments in innovation and acquisitions.

For example, the pharmaceutical giant in 2009 acquired Medarex for $2.1 billion, obtaining the full rights to ipilimumab, a biologic compound that treats metastatic melanoma and lung cancer. Marketed under the brand name Yervoy, these treatments generated $960 million in sales.

Earlier this year, Bristol-Myers Squibb paid $175 million for iPierian, a biotechnology company developing treatments for neurodegenerative disorders such as dementia and Alzheimer’s disease.

Bristol-Myers Squibb remains an industry leader in immune-oncology, or treatments that leverage the body’s immune system to eliminate or slow the growth and spread of cancerous cells. These innovative therapies have the potential to transform many cancers into a chronic disease, as opposed to a life-threatening ailment.

Bristol-Myers Squibb has already doubled its investment in immune-oncology research and development relative to 2013.

Our investment thesis for Bristol-Myers Squibb remains intact: The firm’s financial strength provides ample firepower for smart growth while ensuring the sustainability of its dividend and leaving room for a $3 billion share buyback program.

Although the stock has recovered from its recent lows, the market hasn’t recognized yet the firm’s strategic shift toward higher-margin specialty drugs and biologics and the long-term potential of its immunotherapy portfolio. Bristol-Myers Squibb rates a buy up to $60 per share.

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