Merck (MRK) is a Top Dividend Stock Right Now: Should You Buy?

Zacks Equity Research

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Merck in Focus

Based in Kenilworth, Merck (MRK) is in the Medical sector, and so far this year, shares have seen a price change of 8.11%. The pharmaceutical company is paying out a dividend of $0.55 per share at the moment, with a dividend yield of 2.66% compared to the Large Cap Pharmaceuticals industry's yield of 2.77% and the S&P 500's yield of 1.89%.

Taking a look at the company's dividend growth, its current annualized dividend of $2.20 is up 10.6% from last year. In the past five-year period, Merck has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.01%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Merck's current payout ratio is 46%. This means it paid out 46% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for MRK for this fiscal year. The Zacks Consensus Estimate for 2019 is $4.91 per share, with earnings expected to increase 13.21% from the year ago period.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MRK is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

  • 'Gaetz-crasher': Here's why a Republican lawmaker was barred from closed-door testimony
    Yahoo News

    'Gaetz-crasher': Here's why a Republican lawmaker was barred from closed-door testimony

    When Republican congressman Matt Gaetz tried to attend an impeachment inquiry deposition Monday morning at the U.S. Capitol, he ran smack into the often arcane and confusing rules of Congress. Gaetz, a rabble-rouser from Florida who accused Democrats of dirty tricks last fall, claimed that as a member of the House Judiciary Committee he should be allowed to attend the deposition of Fiona Hill, President Trump's former top Russia and Europe adviser. The impeachment inquiry depositions are being held behind closed doors inside the Capitol.

  • What's causing record rates of STDs?
    Yahoo News 360

    What's causing record rates of STDs?

    The combined number of cases of syphilis, gonorrhea and chlamydia in the U.S. reached an all-time high in 2018, according to the Centers for Disease Control and Prevention. More than 2.4 million cases of the three sexually transmitted diseases were reported last year, an increase of more than 100,000 from the previous year. Congenital syphilis led to 94 newborn deaths in 2018, the CDC said.

  • Booze run from behind bars: Inmates escape from Texas federal prison, return with whiskey
    USA TODAY

    Booze run from behind bars: Inmates escape from Texas federal prison, return with whiskey

    Four inmates from a Texas federal prison were caught after they escaped and returned with whiskey and cellphones, officials said. The Jefferson County Sheriff's Office said investigators began conducting surveillance behind the Federal Prison Complex in Beaumont, Texas, about 90 miles east of Houston, after receiving reports that inmates were leaving to bring back contraband. The men, identified as Julian Lemus, 34, Robert Young, 45, Leo Martinez, 25, and Silvestre Rico, 35, were booked into the LaSalle Correctional Facility on charges of escape.

  • China Built a Flying Saucer
    Popular Mechanics

    China Built a Flying Saucer

    A strange-looking vehicle at an air show in China is getting buzz for an obvious reason: It appears to resemble a UFO. We don't know much about the vehicle, including which sector of the Chinese military built it, and if it can fly or not. Both the U.S. Army and Air Force have previously explored similar projects that have failed.

  • 'Do the right thing,' family of UK teen killed in crash tells U.S. diplomat's wife
    Reuters

    'Do the right thing,' family of UK teen killed in crash tells U.S. diplomat's wife

    The parents of a British teenager killed in a car crash involving a U.S. diplomat's wife vowed on Monday to keep fighting until they get justice for their son after the American woman returned to the United States following the accident. Charlotte Charles and Tim Dunn spoke to media in New York during a visit intended put pressure on the Trump administration to have Anne Sacoolas to be sent back to face British investigators. "She needs to just do the right thing and just come back and face what she's done," said Charles, her voice breaking with emotion.

  • In Jamal Khashoggi's death, Saudi money is talking louder than murder
    USA TODAY Opinion

    In Jamal Khashoggi's death, Saudi money is talking louder than murder

    Anyone interested in what it looks like to get away with murder should peruse the attendee list for Saudi Arabia's flashy "Davos in the Desert" this month. Vaporizing into the desert heat is all the righteous alarm that compelled leading financial firms to boycott the event last year out of concern that Crown Prince Mohammed bin Salman, weeks before, had ordered the grisly killing of Washington Post columnist Jamal Khashoggi. Attending this year's extravaganza are executives of JPMorgan Chase, Goldman Sachs and Citigroup, all of them institutions selected to underwrite the kingdom's highly anticipated, partial public offering of its oil company, Aramco, valued $1.5 trillion to $2 trillion.

  • The US defense secretary gives US's strongest condemnation yet of Turkey's 'unacceptable incursion' in Syria
    Business Insider

    The US defense secretary gives US's strongest condemnation yet of Turkey's 'unacceptable incursion' in Syria

    Defense Secretary Mark Esper issued the US's strongest condemnation of Turkey's military assault on Kurdish forces in northeast Syria on Monday, calling it an "unacceptable incursion" and "impulsive." "Due to Turkey's irresponsible actions, the risk to US forces in northeast Syria has reached an unacceptable level," Esper said. "We are also at risk of being engulfed in a broader conflict."

  • India blocks SMS services in Kashmir after trucker killed
    AFP

    India blocks SMS services in Kashmir after trucker killed

    Text messaging services were blocked in Indian Kashmir just hours after being restored when a truck driver was killed by suspected militants and his vehicle set ablaze, authorities said Tuesday. Separately, Indian officials said a 24-year-old woman died in the latest exchange of artillery fire with Pakistan over their de-facto border dividing the blood-soaked Himalayan region. Three people -- a father and his two children aged 10 and 11 -- were killed in a Pakistani district next to the Line of Control after mortar shells hit their homes, officials said on Tuesday.

  • Buttigieg Claims Warren and Sanders’ Medicare for All Is ‘Infringing on Freedom’ in New Ad
    National Review

    Buttigieg Claims Warren and Sanders’ Medicare for All Is ‘Infringing on Freedom’ in New Ad

    The South Bend, Indiana mayor's minute-long video, titled “Makes More Sense,” features several political reporters and analysts praising his plan and juxtaposing it with Senators Elizabeth Warren and Bernie Sanders' Medicare for All, which would require that roughly 160 million Americans' surrender their private insurance. “Bernie Sanders and Elizabeth Warren believe that we have to force ourselves into Medicare for All, where private insurance is abolished, there are 160 million Americans to get their insurance from their employer,” CNN analyst Joe Lockhart says in a clip included in the ad.

  • White House: Trump 'strongly condemns' parody video of him shooting critics and media outlets in church
    Yahoo News

    White House: Trump 'strongly condemns' parody video of him shooting critics and media outlets in church

    The White House on Monday tried to distance itself from a violent parody video that shows President Trump shooting and stabbing critics and members of the media in a church. “But based upon everything he has heard, he strongly condemns this video,” Grisham tweeted. According to the New York Times, the crude video was shown at a pro-Trump conference at the president's Doral Miami resort over the weekend, where Donald Trump Jr. and former White House press secretary Sarah Sanders were among the guest speakers.

  • Jeep Gladiator Gets Even More Rugged as a Military-Spec Vehicle
    Car and Driver

    Jeep Gladiator Gets Even More Rugged as a Military-Spec Vehicle

    AM General is known for turning the Humvee into the civilian Hummer, but now the company is teaming with Jeep to build a military-grade Jeep Gladiator. The Gladiator XMT (Extreme Military-Grade Truck) features massive off-road tires, two 4x4 systems, skid plates and tow hooks, and the doors and roof are removed. The XMT could go into production as soon as late 2020, but only if the U.S. Army places the order.

  • Woman will spend 60 years in prison for first-degree murder of boyfriend
    Yahoo News Video

    Woman will spend 60 years in prison for first-degree murder of boyfriend

    A woman who poured gasoline on the couch where her sleeping boyfriend lay and then shut the door after seeing him jump up and yell "hot, hot" will spend 60 years in prison for first-degree murder.

  • Hong Kong's leader: Territory not becoming a police state
    Associated Press

    Hong Kong's leader: Territory not becoming a police state

    Hong Kong's leader said Tuesday that "it's totally irresponsible and unfounded" to suggest the semi-autonomous Chinese territory is becoming a police state as her government grapples with protests now in their fifth month. In a spirited defense of Hong Kong's 30,000-strong police force and her handling of the protests in response to criticism from visiting U.S. senators, Carrie Lam challenged the notion that the territory is losing its freedoms, unique in China, as police battle demonstrators in the streets. "I would challenge every politician to ask themselves if the large extent of violent acts, and all those petrol bombs and arson and deadly attacks on policemen, happened in their own country, what would they do?

  • When police misconduct occurs, records often stay secret. One mom's fight to change that.
    USA TODAY

    When police misconduct occurs, records often stay secret. One mom's fight to change that.

    Furious about the way she was treated, she worked with other families whose relatives were killed by police to help push for the recent passage of California's new Senate Bill 1421, which as of January 1 overrides decades of precedent and requires police departments to open internal investigation records related to deadly force and police wrongdoing. The law could inspire reform at police departments across the nation at a time when the relationship between police and the public is fraught with tension following numerous fatal shootings, particularly involving victims of color.

  • Everything Google Revealed at Its NYC Pixel Event
    Popular Mechanics

    Everything Google Revealed at Its NYC Pixel Event

    Smartphones, smart speakers, and other smart stuff. From Popular Mechanics

  • Reuters

    France warns of 'endless soap opera' on EU membership talks with Balkans

    France stuck to its hardline position against European Union membership talks for North Macedonia and Albania on Tuesday, warning it could not approve negotiations until the bloc reformed the "endless soap opera" of admitting new members. Europe ministers, making a third attempt since June 2018 to approve membership talks for the Balkan hopefuls, are set to discuss in Luxembourg opening a path for Skopje and Tirana, with broad EU support and backing from the United States. But Amelie de Montchalin, France's European affairs minister, said there could be no way forward until what French President Emmanuel Macron in July called "deep reform" of EU membership rules.

  • Anthony Scaramucci is desperately trying to recruit Mitt Romney for a 2020 run
    The Week

    Anthony Scaramucci is desperately trying to recruit Mitt Romney for a 2020 run

    Sen. Mitt Romney (R-Utah) is running for president again — at least in Anthony Scaramucci's dreams. The famously short-lived White House communications director has since turned on the president who appointed him, and has publicly said he's trying to knock President Trump off the 2020 ticket. Now, it seems Scaramucci has decided on his dream candidate, and has launched a website and line of T-shirts to persuade him to run.

  • What Did America Offer North Korea at Working-Level Talks? One Report Claims To Know.
    The National Interest

    What Did America Offer North Korea at Working-Level Talks? One Report Claims To Know.

    Do we finally know what U.S. negotiators offered North Korea at recent working-level talks that broke down in just a few hours? The US offered to temporarily suspend the ban on North Korean exports of coal and textiles as a reward for denuclearization. After the working-level meeting in Stockholm on Oct. 4-5, North Korea declared that the talks had broken down and claimed that the US had shown up “empty-handed.” The US State Department countered by saying it had brought “creative ideas.” The Japanese paper said that these “creative ideas” were the rewards offered during the talks.

  • Kurds agree to Russian-brokered plan to allow Assad into their territory
    The Telegraph

    Kurds agree to Russian-brokered plan to allow Assad into their territory

    The West's Kurdish allies on Sunday night announced they had agreed to a Russian-brokered deal to allow the Assad regime into their territory in a bid to spare their cities from a Turkish assault after they were abandoned by Donald Trump. Hours after the US said it was withdrawing all of its troops from northern Syria, the Syrian Democratic Forces (SDF) said it had reached an agreement to allow Bashar al-Assad's troops into their territory. If we have to choose between compromises and the genocide of our people, we will surely choose life for our people,” said Mazloum Kobani Abdi, the commander of the SDF.

  • Mass raids target Russian opposition chief
    AFP

    Mass raids target Russian opposition chief

    Russian investigators raided opposition offices across the country on Tuesday, in the latest move to increase pressure on top Kremlin critic Alexei Navalny and his allies. The early morning raids targeted more than 100 offices and homes in 30 cities, the opposition said, including the headquarters of Navalny's Anti-Corruption Foundation (FBK) in Moscow. Navalny, an anti-corruption campaigner who has emerged as President Vladimir Putin's most prominent critic, denounced the raids as an attempt to intimidate the opposition after a summer of protests and significant losses suffered by Kremlin allies in local elections in September.

  • California Mandates Free Abortion at Public Colleges
    National Review

    California Mandates Free Abortion at Public Colleges

    Democratic governor Gavin Newsom has signed legislation making California the first state in the country to require public colleges and universities to provide medical-abortion pills to students at campus health centers. S.B. 24, or the College Student Right to Access Act, will compel all 34 University of California and California State University campuses to make the RU-486 chemical-abortion pill available through campus health centers by 2023, in theory at no cost to students. Last fall, then-governor Jerry Brown refused to sign the legislation, using talking points similar to those that pro-life groups such as Students for Life of America used when lobbying against the bill.

  • 7-story building collapses in Brazil; 1 dead, others trapped
    Associated Press

    7-story building collapses in Brazil; 1 dead, others trapped

    A seven-story building collapsed Tuesday in an upscale part of the Brazilian city of Fortaleza, killing one person and leaving others trapped with some communicating with family members by cellphone from under debris, officials said. Fire department commander Cleyton Bezerra said nine people were missing, though it was unclear if they were under the rubble or just unreachable by relatives and friends. Authorities in the city of 2.6 million inhabitants in Brazil's northeast said two trapped people were communicating with relatives and rescuers by phone.

  • We found 85,000 cops who’ve been investigated for misconduct. Now you can read their records.
    USA TODAY

    We found 85,000 cops who’ve been investigated for misconduct. Now you can read their records.

    At least 85,000 law enforcement officers across the USA have been investigated or disciplined for misconduct over the past decade, an investigation by USA TODAY Network found. Despite their role as public servants, the men and women who swear an oath to keep communities safe can generally avoid public scrutiny for their misdeeds. The records of their misconduct are filed away, rarely seen by anyone outside their departments.

  • Hong Kong Protesters Rage Against Corporate China's Growing Control
    Bloomberg

    Hong Kong Protesters Rage Against Corporate China's Growing Control

    The black-clad protesters pushing back against China's influence in Hong Kong aren't just focusing on Carrie Lam and the police. They're also targeting mainland-based brands such as Bank of China Ltd., China Mobile Ltd. and Huawei Technologies Co. with fire bombs, metal bars and spray paint. A walk down the primary route used by Hong Kong's anti-government marchers shows how big a chunk of the city China owns.

  • Nigerian police rescue 67 from 'inhuman' conditions at Islamic 'school'
    Reuters

    Nigerian police rescue 67 from 'inhuman' conditions at Islamic 'school'

    Police in northern Nigeria rescued nearly 70 men and boys from a second purported Islamic school where they were shackled and subjected to "inhuman and degrading treatments." The raid in Katsina, the northwestern home state of President Muhammadu Buhari, came less than a month after about 300 men and boys were freed from another supposed Islamic school in neighboring Kaduna state where they were allegedly tortured and sexually abused. "In the course of investigation, sixty-seven persons from the ages of 7 to 40 years were found shackled with chains," Katsina police spokesman Sanusi Buba said in a statement.