Bristol Myers Squibb vs. Novo Nordisk: Which Healthcare Stock Is a Better Buy in 2026?

Investors often weigh the stability of established giants against the high-octane growth of market leaders. Choosing between Bristol Myers Squibb Co. (NYSE:BMY) and Novo Nordisk A/S (NYSE:NVO) requires balancing valuation against expansion potential in 2026.

Bristol Myers Squibb operates as a diversified biopharmaceutical powerhouse with a deep portfolio in cancer and blood disorders. Conversely, Novo Nordisk has become a household name through its dominance in the obesity and diabetes markets. Both companies are navigating shifting regulatory landscapes, making a data-driven comparison essential for healthcare investors.

The case for Bristol Myers Squibb

Bristol Myers Squibb discovers and delivers medicines for serious diseases, primarily focusing on oncology, hematology, and neuroscience. It markets these products to wholesalers, distributors, and specialty pharmacies. Major products like Eliquis and Opdivo drive significant revenue, though the company recently terminated a manufacturing agreement with Cellares in August 2026. This strategy prioritizes maintaining leadership in high-demand therapeutic areas.

In its latest annual report, filed for FY 2025, the company reported revenue of about $48.2 billion. This represented a slight year-over-year decrease of roughly 0.2%. Despite the flat sales, the company reported net income of approximately $7.1 billion. This figure reflects a significant recovery from the net loss recorded during the previous fiscal year, as the business stabilized its operating costs.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 2.6x. This ratio measures total debt against the value owned by shareholders, suggesting the company uses significant leverage in its capital structure. Its current ratio, which compares short-term assets to liabilities, was approximately 1.3x. Free cash flow for the year reached about $12.8 billion, representing the cash remaining after paying for equipment and infrastructure.

The case for Novo Nordisk A/S

Novo Nordisk is a global healthcare leader dedicated to defeating chronic conditions such as diabetes and obesity. It maintains a dominant position among pharmaceutical stocks through its specialized GLP-1 therapies. The company operates extensively across the United States, Europe, and emerging markets. By focusing on high-growth chronic diseases, it has built a resilient and expanding business model.

For FY 2025, revenue reached approximately $46.3 billion, indicating growth rate of roughly 6.4% compared to the prior year. Net income for the period was close to $15.3 billion. This resulted in an impressive net margin of nearly 33.1%, which measures how much of every dollar in revenue remains as profit after all expenses are paid.

On its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.7x. This indicates a conservative use of borrowed money relative to shareholder equity. Its current ratio was roughly 0.8x, indicating that short-term liabilities slightly exceed liquid assets. Free cash flow for the year was nearly $4.3 billion, providing the company with ample capital for research, development, and dividend payments to investors.

Risk profile comparison

Bristol Myers Squibb faces significant revenue concentration, as a few products like Eliquis and Opdivo generate the majority of its earnings. This makes the company vulnerable to generic competition and patent expiries. Furthermore, the U.S. Inflation Reduction Act has introduced pricing pressures, while a $6.7 billion lawsuit regarding the Celgene acquisition remains a legal headwind. The company also deals with the inherent risks of R&D failures, such as the termination of a leukemia trial in October 2026. It competes for market share with rivals like Merck & Co. (NYSE:MRK) and Pfizer Inc. (NYSE:PFE).

Novo Nordisk faces intense competition from Eli Lilly & Co. (NYSE:LLY) in the lucrative weight-loss and diabetes treatment markets. Legislative efforts in the United States to negotiate lower drug prices could also impact future revenue growth. Furthermore, the company must manage complex manufacturing requirements to meet the surging global demand for its blockbuster treatments. Any supply chain disruptions or manufacturing bottlenecks could limit its ability to capitalize on its market-leading position. Reliance on a specific class of drugs also exposes the company to regulatory and safety scrutiny.

Valuation comparison

Bristol Myers Squibb offers a more attractive entry point based on earnings multiples, while Novo Nordisk reflects a premium valuation justified by its high profitability and growth.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

The Forward P/E ratio compares a company's current stock price to its future earnings estimates over the next twelve months. The P/S ratio measures the stock price relative to sales over the past twelve months.

Which stock would I buy in 2026?

Novo Nordisk has the blockbuster drugs Wegovy and Ozempic (the same drug marketed for different purposes), but faces investor doubts about its market position given a deal with the federal government to lower prices for the GLP-1s, the emergence of generic competitors, and the apparent advances by Eli Lilly & Co. in developing weight loss drugs expected to be superior to Novo's offerings.

Still, the introduction of the once-a-day Wegovy pill in the U.S. has been a resounding success, and the business has a patent on the injectable Ozempic/Wegovy until 2032, providing it with a competitive moat. Still, Wall Street sees sales declining by about 3% in fiscal 2026, with net income contracting by 4% as pricing pressures slightly erode margins. That has the company labeled a "value trap" by some analysts. Long-term, analysts expect the company to reverse the 2026 decline and resume growth as new products come online.

Bristol Myers Squibb has made positive strides, with its newer growth brands gaining traction and some interesting candidates in the pipeline. The stock is cheap, and that seems to be for good reason. Investors have already priced in much of the upcoming difficulty, which softens the downside but does not make it an obvious buy right now. Bristol Myers Squibb's recovery timeline is hard to predict.

Revenue for the current fiscal year should edge up 3% to $49.8 billion, with a much healthier rise in net income of more than 40% to $11.2 billion.

Bristol Myers has an attractively low forward price-to-earnings and sales ratios, but of course, that reflects some continued rough sailing ahead.

There are risks to both of these healthcare giants. But the GLP-1 revolution seems to have a lot of runway to continue and make Novo Nordisk an attractive buy-low candidate given the ever-expanding market of shrinking waistlines. Right now, Novo Nordisk is the better buy.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb, Eli Lilly, Merck, Novo Nordisk, and Pfizer. The Motley Fool has a disclosure policy.