Why Merck (MRK) is a Great Dividend Stock Right Now

Company Overview - Merck (MRK) is a pharmaceutical company based in Rahway, operating in the Medical sector, with a year-to-date share price change of -11.86% [3] Dividend Information - Merck currently pays a dividend of $0.81 per share, resulting in a dividend yield of 3.7%, which is higher than the Large Cap Pharmaceuticals industry's yield of 2.31% and the S&P 500's yield of 1.52% [3] - The annualized dividend of$ 3.24 represents a 3.8% increase from the previous year, with Merck having increased its dividend five times over the last five years, averaging an annual increase of 5.95% [4] - The company's current payout ratio is 42%, indicating that it pays out 42% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - Merck is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 at $9.03 per share, reflecting a year-over-year earnings growth rate of 18.04% [5] Investment Considerations - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [6] - High-yielding stocks may face challenges during periods of rising interest rates, but Merck is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]