Bristol Myers Squibb vs. Eli Lilly and: Which Healthcare Stock Is a Better Buy in 2026?

Bristol Myers Squibb (NYSE:BMY) and Eli Lilly & Co (NYSE:LLY) represent two different paths in the healthcare market. Choosing between a deep-value dividend payer and a high-growth pharmaceutical juggernaut is the ultimate dilemma for investors today.

Bristol Myers Squibb focuses on established blockbusters in oncology and hematology while managing a maturing drug portfolio through strategic acquisitions. Eli Lilly and has recently dominated headlines with its breakthroughs in metabolic treatments for weight loss and diabetes. Both operate in the same sector, but their financial profiles suggest very different roles for your portfolio.

The case for Bristol Myers Squibb

Bristol Myers Squibb operates as a global biopharmaceutical leader, delivering treatments for serious diseases across oncology, immunology, and cardiovascular health. It generates revenue by selling to wholesalers, specialty pharmacies, and government agencies, with a heavy reliance on blockbusters like Eliquis and Opdivo. The company recently ended a manufacturing partnership for its Breyanzi platform, showing the difficulty of scaling complex cell therapies in a competitive market. This shift highlights a focus on internal capabilities to manage its most advanced therapeutic lines.

In FY 2025, revenue reached about $48.2 billion, representing a slight decline of roughly 0.2% compared to the prior year. Despite the flat top-line performance, the company reported a net income of approximately $7.1 billion, which results in a net margin of roughly 15%. This signifies a return to profitability after a significant loss in the previous fiscal year, suggesting a stabilization in its core earnings power.

As of its December 2025 balance sheet, the debt-to-equity ratio was nearly 2.6x, which measures total debt against the value owned by shareholders. This level suggests the company relies more on borrowing than its own equity for financing compared to other pharmaceutical stocks in the market. Its current ratio, which measures the ability to pay short-term debts with short-term assets, was close to 1.3x. Free cash flow, calculated as cash from operations minus capital spending, was around $12.8 billion, providing ample room for dividends.

The case for Eli Lilly & Co.

Eli Lilly & Co. develops and markets medicines in approximately 90 countries, with a massive focus on cardiometabolic health and oncology. It reaches patients through major wholesalers like McKesson Corp (NYSE:MCK), Cencora Corp (NYSE:COR), and Cardinal Health (NYSE:CAH), while also expanding its direct-to-consumer reach through LillyDirect. Recent strategic acquisitions in mental health and autoimmune treatments aim to diversify its future product pipeline and maintain its market-leading position. This diversification strategy is intended to reduce reliance on its current top-selling products.

In FY 2025, revenue reached about $65.2 billion, marking an impressive growth rate of nearly 45% over the previous year. Net income for the year was approximately $21 billion, driven by the explosive popularity of its newer metabolic and weight-loss treatments. The net margin, which is the percentage of revenue remaining after all expenses are paid, sat close to a robust 32%. This significant growth highlights the ability to scale high-demand products rapidly.

According to its December 2025 balance sheet, the debt-to-equity ratio was approximately 1.6x. This indicates a more conservative use of debt relative to equity, suggesting the company maintains a strong capital structure to support its expensive research and development efforts. Its current ratio was nearly 1.6x, suggesting a comfortable cushion for meeting immediate financial obligations. Free cash flow for the year was close to $9 billion, supporting its ongoing investment in manufacturing capacity.

Risk profile comparison

Bristol Myers Squibb faces significant pressure from the U.S. Inflation Reduction Act, which allows the government to negotiate prices for top-selling drugs. The company also deals with the constant threat of patent expirations, where losing exclusivity leads to rapid revenue declines as generic competitors enter the market. Clinical trial failures or safety warnings on advanced therapies also pose risks to its long-term growth pipeline and ability to replace aging brands.

Eli Lilly carries a high concentration risk, as roughly 82% of its revenue comes from a small group of metabolic and oncology products. Government price negotiations also affect its portfolio, with key drugs like Jardiance being selected for mandated price cuts. It faces stiff competition from companies like Merck & Co. (NYSE:MRK) and Pfizer Inc (NYSE:PFE) while navigating complex supply chains that often rely on single-source suppliers in China.

Valuation comparison

Bristol Myers Squibb appears significantly cheaper than Eli Lilly when comparing their multiples of earnings estimates and sales over the past twelve months. The Forward P/E, which measures the current stock price against future earnings estimates, is much lower for Bristol Myers Squibb. Similarly, its P/S ratio, which compares market value to sales over the past twelve months, suggests a lower price relative to its revenue.

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

Which stock would I buy in 2026?

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 a lot of the difficulty ahead, which softens the downside but does not make it an obvious buy right now. Bristol Myers Squibb's timeline for recovery is hard to predict.

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

Eli Lilly is riding a wave of success with its GLP-1 drugs Zepbound for weight loss and Mounjaro, which is the same drug for diabetes control. There is still plenty of growth left in the treatment, and that is expected to power revenue up as high as 30% in 2026, to $85.2 billion, with close to $31 billion in net income. Its next weight-loss drug, Retatrutide, is hotly anticipated for its triple-agonist approach, which is expected to exceed the weight-loss results of Zepbound. The company is also targeting less affluent customers with a lower-cost GLP pill called Foundayo, which it sells directly to consumers.

Besides GLP-1s, Lilly is working on a small interfering RNA therapeutic targeting lipoprotein(a) for the prevention of atherosclerotic cardiovascular disease in patients with elevated lipoprotein(a) levels. Analysts believe it will be a blockbuster ($1 billion or more lifetime revenue) if approved.

Simply put, Bristol Myers Squibb may have lower ratios, but its not the stock to buy here. Eli Lilly's GLP-1 successes and its forecast for strong growth ahead make it the pick.

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, and Pfizer. The Motley Fool has a disclosure policy.