Healthcare is a defensive sector that is more resilient to economic downturns than most others. That's one of several reasons it is home to solid dividend stocks, including Pfizer (PFE -0.49%) and Bristol Myers Squibb (BMY 0.23%), two of the leading pharmaceutical companies in the world. In addition to their strong income profiles, both drugmakers look incredibly cheap at their current levels, making them excellent picks.

Read on to find out why dividend seekers can confidently add Pfizer and Bristol Myers Squibb to their portfolios.

1. Pfizer

Pfizer has encountered some issues in recent years. Sales of its coronavirus products fell off a cliff, and some of the company's older products are no longer the growth drivers they once were. As a result, the stock has lagged the market, but the sell-off might be a bit overdone. Pfizer's forward price-to-earnings (P/E) ratio of 8.9 looks dirt cheap compared to the healthcare industry's average of 17.2. Pfizer looks attractive at these levels, considering its prospects.

The company is putting the small fortune it earned thanks to its coronavirus efforts to work. The drugmaker significantly expanded its pipeline in the past three years and boasts investigational products across a range of therapeutic areas. Pfizer's work in oncology looks especially promising -- the company's pipeline features almost 60 programs in this field, including many in late-stage studies.

Pfizer plans to launch several blockbuster oncology drugs in the next few years. The company is also looking to join the weight loss market with a GLP-1 candidate, danuglipron. Meanwhile, Pfizer's COVID-19 portfolio is still generating strong sales and was largely responsible for the company's revenue moving in the right direction last year. Pfizer's top line in 2024 was $63.6 billion, 7% higher than the previous fiscal year.

Between Pfizer's lineup (including its coronavirus products) and deep pipeline, the company's business still looks robust. Further, due to the steep drop in its shares for the past few years, Pfizer's forward yield looks juicy at 6.7% -- the S&P 500's average is 1.3%. Pfizer has continued to increase its payouts despite the issues it has faced. The pharmaceutical giant will rebound eventually as its recent investments pay off. Long-term, income-oriented investors should consider scooping up its shares while they remain down.

2. Bristol Myers Squibb

Bristol Myers Squibb has encountered significant patent cliffs in the past few years, but the company has come out of these troubles just fine. Last year, the drugmaker's revenue increased by 7% to $48.3 billion.

Bristol Myers has dealt with patent cliffs the old-fashioned way -- by developing newer products that are now helping drive solid growth. That includes Reblozyl, a medicine for anemia in beta-thalassemia patients that was first approved in 2019. Reblozyl now generates well over $1 billion in annual sales.

Some of the company's legacy medicines are still making massive contributions, including anticoagulant Eliquis and cancer drug Opdivo. What happens when these products also lose patent protection? Bristol Myers will go through a period of declining sales, but it will recover. Since Reblozyl in 2019, the company has earned approval for over half a dozen other brand-new medicines that are slowly gaining prominence.

Bristol Myers also has a deep pipeline that features 50 clinical compounds in development -- some are new ones that have never earned approval for any indication. For instance, Bristol Myers is testing iberdomide in several clinical trials in myeloma patients. Golcadomide, another compound in development, is being studied in B-cell lymphoma.

Bristol Myers should succeed in launching brand-new medicines in the next few years. And in the long run, patent cliffs won't sink its prospects. They haven't before. Meanwhile, the drugmaker offers a forward yield of 4.20% and routinely raises its dividends. Further, Bristol Myers' forward P/E of 8.9 looks more than reasonable.

While the market has been volatile and could sink even more, investors don't need to wait for that to find bargains, thanks to attractively valued dividend stocks like Bristol Myers and Pfizer.