With politicians on both sides of the aisle calling for drug price controls, it has been a challenging environment for a host of medical sectors, notes Chuck Carlson, editor of DRIP Investor.

However, you can often find good value in such beaten-up market segments, and Bristol-Myers Squibb (BMY)  is a shining example of that value.

Bristol-Myers Squibb has a number of factors in its favor, not the least of which is solid revenue and earnings growth potential over the next 12 months, an attractive dividend yield of over 3%, and a potential kicker in the pending acquisition of Celgene (CELG).

Leading brands include Opdivo, Eliquis, Plavix, Orencia, and Yervoy. Revenues will grow sharply with the addition of Celgene. The deal is expected to close at the end of this year or first quarter of 2020.

The addition of Celgene will push annual revenues over $40 billion and give the combined company the number one position in oncology and cardiovascular drugs.

Bristol-Myers shares trade for just eight times the 2020 earnings estimate, so investors aren’t paying much for the expected growth.

Bristol-Myers is taking on a big chunk of debt to pay for the Celgene deal, so I would expect fairly modest dividend growth in the next few years until the company can pay down that debt load. Still, the stock yields a healthy 3.1% at its current dividend rate of $0.41 per quarter.

I have owned these shares for many years and can’t remember the last time I saw these shares so appealingly priced. The stock has shown much better price action in recent months, and I expect these shares to outperform the market over the next year.

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