Current Dividend Yield: 4.6%
Year-to-Date Performance: -8%
Merck (NYSE:MRK) is very similar to Pfizer, except for its lagging performance. It, too, faces patent expirations and is hoping its pipeline will step up to fill the void. It, too, is trading for a bargain P/E of 8.7. It, too, pays a dividend well north of 4%. Investors looking for a lot of fireworks probably will be disappointed by this Big Pharma stock, but just because Merck isn’t sexy doesn’t mean it can’t be profitable. A huge $41 billion buyout of rival Schering-Plough in 2009 should help provide new areas of growth. Throw in solid cash flow and a history of dividends since 1935, and you can understand why this stable company is a bedrock buy for many portfolios.