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Top 10 Dow Dividend Stocks for November

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#4: Merck (MRK)

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Dividend Yield:
YTD Performance: +20%

Just as rival Pfizer got hooked on Lipitor, Merck (MRK) became addicted to Singulair, and the weaning process has been painful. The blockbuster allergy and asthma medication was the 11th-best-selling drug in the world until Merck lost exclusive rights to sell it last year and cheaper generics swamped the market.

Shares are up just 20% for the year-to-date, and the valuation looks stretched at 14 times forward earnings when the five-year average is closer to 10. MRK also looks a bit pricey on a trailing earnings basis, and by price/earnings-to-growth (PEG).

But that generous 3.5% yield on the dividend still makes Merck look like a core equity-income holding, especially considering the very low volatility. Indeed, MRK is about half as volatile as the broader market.

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