Despite a poor market performance during the week ending Sept. 6, the past 20 months have been remarkable for most investors. The S&P 500 index has soared 40.9% since the end of 2022, even though September started off rough. This spike reminds us that markets don't always rise steadily and another bear market could be around the corner. In uncertain times like these, investing in dividend-paying companies such as Bristol Myers Squibb (BMY -2.21%) and Royalty Pharma (RPRX -1.27%) is a smart move. While their stock prices may fluctuate, the quarterly dividends they distribute remain consistent. Better yet, both companies have been quickly raising their dividends, meaning your initial investment yield could multiply before retirement. With just $100, you can invest in both of these resilient stocks. Discover how adding them to a diversified portfolio can significantly enhance your passive income stream.

Bristol Myers Squibb is a century-old pharmaceutical giant renowned for marketing Eliquis, an oral blood thinner, in partnership with Pfizer. Eliquis sales soared to $13.7 billion annually in the second quarter and it's not the only catalyst driving Bristol Myers Squibb's dividend higher. At recent prices, the company offers a 4.9% yield, having raised its dividend for 15 consecutive years with an average annual increase of 7.9% over the last five years. Although Eliquis could lose its patent protection in the E.U. by 2026 and in the U.S. by 2028, Bristol Myers Squibb has other growth drivers to compensate for these potential losses. The Food and Drug Administration is expected to approve a subcutaneous injection of Opdivo, a cancer immunotherapy, by December. In the second quarter, sales of the infused version of Opdivo rose 11% from the previous year to $9.5 billion annually. Besides a new Opdivo version, approval for marketing KarXT, an innovative antipsychotic drug, might be on the horizon.

Unlike others, KarXT does not act on dopamine receptors, making it easier to tolerate. Additionally, Opdualag, a skin cancer drug approved in 2022, is boosting growth by treating newly diagnosed patients, with second-quarter sales climbing 63% year-over-year to $1.8 billion. As the new standard of care for inoperable melanoma, Opdualag sales could skyrocket.Royalty Pharma finances drugmakers, who often face criticism for high prices, but their products account for a surprisingly small portion of national medical expenses. In 2022, prescription drug spending rose 8.4% to $405.9 billion, less than a third of hospital expenses. While individual drug launches are unpredictable, overall drug sales are expected to rise long-term. With stakes in products from numerous companies, Royalty Pharma offers a dependable way to benefit from this trend.

Its profits spiked and then dipped with the demand for COVID-19 vaccines, but recent investments are set to boost its bottom line once again. Currently, Royalty Pharma garners royalties from 15 blockbuster drugs generating over $1 billion in annual sales. Although some drugs in their portfolio are declining, new additions are outweighing these losses and driving profits higher, with trailing 12-month free cash flow increasing 60% since early 2020. Royalty Pharma began paying dividends in 2020 and has already increased its payout by 40% to $0.21 per share. With recent prices, the stock offers a 2.9% yield that could rapidly grow due to portfolio expansions.

Over the past 12 months, Royalty Pharma generated $2.7 billion in free cash flow but only spent $368 million on dividends. This surplus allows for dividend increases and new investments. This year alone, the company plans to deploy around $2 billion in capital. At present, Royalty Pharma receives royalties from 35 commercial-stage drugs, including 15 blockbusters. With increased capital for deployment, future royalties and dividends could surge dramatically in the next decade.