Is Bristol Myers Squibb's Dividend at Risk? Insights into the Company's Financial Health

Should investors brace for a dividend cut?

Bristol Myers Squibb (NYSE: BMY) pays investors an attractive dividend, which yields an incredibly high rate of 5.5%. That's nearly four times the S&P 500 average of 1.4%. At such a high rate, investing approximately $18,200 would be enough to generate $1,000 in annual dividends from the stock.

The company recently posted a big loss

On April 25, Bristol Myers reported its most recent quarterly numbers. While its top line was decent -- the healthcare company's revenue grew by 5% year over year to $11.9 billion -- the bottom line was problematic.

• The company incurred a loss that looked much like its revenue, except it was negative.
• At $11.9 billion, Bristol Myers' loss was primarily a result of acquired in-process research and development charges stemming from its acquisition of Karuna Therapeutics and a collaboration with SystImmune.

Is Bristol Myers generating enough profit to support its dividend?

Bristol Myers is currently paying $0.60 per share in quarterly dividends. To comfortably support its payout, it should be generating earnings per share (EPS) of more than $2.40.

Bristol Myers' dividend looks safe, despite what may have looked like a troubling first-quarter result. Investors shouldn't expect a dividend cut in the near future.In the long run, there's a bit more risk.