Why BHC Shares Stay Strong While Viatris Wilts

Bausch Health (NYSE:BHC) broke out late last year and the stock did not look back. Why are investors bullish on it but are bearish on Viatris (NASDAQ:VTRS), a generics giant?

BHC said on April 1 that it will sell its equity interest in Amoun Pharmaceuticals. This will raise around $740 million for BHC, helping it cut its debt. The more debt it cuts, the lower the risk for investors holding BHC stock.

Cash flow from operations continues to improve. On April 7, the company said it would cut its debt by $100 million by redeeming 7% senior secured notes.

Viatris, formed from the merger of Pfizer’s (NYSE:PFE) Upjohn unit and Mylan, wilted when the company posted a light outlook. In Jan., the company described 2021 as a trough. It does not expect revenue will grow in the near term. Investors expected modest revenue growth and decent dividend distribution. Investors are better off buying Pfizer or some other drug stock, any of which offers a high dividend yield.

VTRS stock is unattractive at this time. BHC already rose but has more upside ahead as it spins off its B+L unit. Management is maximizing shareholder value.