Current Dividend Yield: 4.2%
Performance So Far in 2013: +1%
But, just like Pfizer, it has had its share of hurdles to overcome.
Merck’s $5 billion asthma drug Singulair went off-patent last year, and that was followed up by approvals for numerous pharmaceutical companies to sell generic forms of the drug. MRK also took a dive a couple weeks ago after announced it was delaying its push for the FDA approval of its osteoporosis drug odanacatib. The company also was cautious with its 2013 profit outlook, saying it expects revenue to be in line with 2012.
On the plus side, Merck’s in the midst of an aggressive grab at the Alzheimer’s treatment market with MK-8931, a BACE inhibitor, which it started putting through mid-stage trials in December. It also received FDA approval for an over-the-counter version of Oxytrol, which treats overactive bladders in women.
In its most recent quarter, Merck enjoyed strong sales of the diabetes drug Januvia and cervical cancer vaccine Gardasil, which helped keep Q4 revenue and earnings declines in check. The company reported 83 cents per share on $11.7 billion, beating expectations for 81 cents per share and $11.49 billion, respectively.
Merck’s 2009 buyout of Schering-Plough has kept and will continue to keep product line rolling, and a huge war chest of almost $15 billion in cash and short-term investment will keep powering its dividend — bumped up from 42 cents to 43 cents quarterly late last year for a current yield of more than 4%.