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Yahoo
3 days ago
- Business
- Yahoo
Should You Forget Pfizer and Buy This Magnificent Dividend Stock Instead?
Key Points Pfizer stands as one of the largest pharmaceutical companies in the world. Although it has an attractive 7.1% yield, it has a big blemish in its dividend past. Investors looking at drug stocks would be better off with this lower-yielding competitor. 10 stocks we like better than Pfizer › One of the big reasons to like Pfizer (NYSE: PFE) today is its huge 7.1% dividend yield. To put that yield into context, the S&P 500 index is yielding roughly 1.3% and the average healthcare stock a bit over 1.7%. Pfizer competitor Merck (NYSE: MRK) is yielding a little more than 4%, yet dividend investors will probably be better off with Merck. Here's why. Pfizer and Merck have similar business models While Pfizer's dividend yield is clearly much higher than Merck's, both have relatively attractive yields today. And you could easily make the argument that the two pharmaceutical companies basically do the same thing. Thus, you might as well buy the higher-yielding stock here. That isn't an unreasonable position to take. Essentially, these two industry giants make drugs. They make different drugs, of course, but both are focused on conducting research intended to create new blockbuster drugs that they can sell exclusively until the patents run out. Both have massive and well-funded research and development teams. Both have global distribution systems and strong marketing groups. And both have the scale to buy smaller competitors with promising drugs, if they need to. In the short term, there will be differences between the two with regard to the drugs they have. So at times Pfizer will be better positioned than Merck, and vice versa. Given their vastly different yields, it is pretty clear that Wall Street believes Merck is better positioned right now. The problem with Pfizer is the dividend, not the yield Right now, Pfizer has a streak of 15 consecutive dividend increases. Merck's streak is also 15 years long. The issue is what happened roughly 15 years ago. As the chart below shows, Pfizer cut its dividend and Merck did not. That was a long time ago, of course, and the business environment was much different. The cut came in the middle of the Great Recession, when there were very real concerns that global financial systems would collapse. Notably, Pfizer cut the dividend at the same time it made a large acquisition. And yet Merck didn't cut its dividend; it has also made large acquisitions in the past, including its own sizable merger in 2009. To be fair, Merck's dividend was static for a long period of time, but going without a dividend increase is much more attractive for an income investor than suffering through a dividend cut. Why investors buy Pfizer and Merck If you are like me, you are not a healthcare specialist. Buying small drugmakers with novel products that are still in the testing phase is likely a non-starter. I just don't know enough to understand what is going on at such companies. And I certainly don't know how to analyze the likelihood that a new drug will get approved. Pfizer and Merck both have portfolios of already approved drugs. So there's a core business supporting their research efforts. On that front, they have both proven over time that they can successfully perform the R&D needed to find new drugs. And if their drug pipeline is soft, they have proven that they will go out and buy smaller companies to bolster it. In essence, Pfizer and Merck let you own a pharmaceutical company without having to spend a huge amount of time and effort trying to dig deeply into the drug business. But if you are trusting a company in this way, which is perfectly fine to do, you need to make sure you can trust it in other ways, too. If you are a dividend investor, Pfizer's dividend cut during the deep 2007 to 2009 recession just doesn't provide the same level of trust that Merck's steadily, though not annually, growing dividend does. Most investors will probably be better off erring on the side of caution here and buying Merck over Pfizer. Should you invest $1,000 in Pfizer right now? Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pfizer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool has a disclosure policy. Should You Forget Pfizer and Buy This Magnificent Dividend Stock Instead? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
2 Top Stocks Down 16% and 17% This Year to Buy and Hold
Merck and Bristol Myers Squibb are facing challenges due to recent (and future) patent cliffs. Both drugmakers have deep pipelines that could allow them to overcome this challenge. Their valuations currently make them look dirt cheap. 10 stocks we like better than Merck › Most people love a bargain; investors do too. Purchasing shares of companies that can perform well over long periods is already pretty exciting, but it's even more so when they can be scooped up from the discount bin. And there's no need to wait for a major stock-market meltdown to do that. Stocks facing company-specific issues for which the market has punished them -- but from which they can recover -- offer attractive bargain opportunities. Here are two great examples to consider: Merck (NYSE: MRK) and Bristol Myers Squibb (NYSE: BMY). These healthcare specialists are down 16% and 17% this year, respectively. But they remain excellent long-term investment options, especially at current levels. Merck is fast approaching the loss of patent exclusivity for Keytruda, its biggest growth driver by far. The cancer medicine should start facing biosimilars in the U.S. by the end of the decade. Although that still looks far away, drugmakers must plan for major patent losses years in advance. And Merck could face non-biosimilar competition before that, including from Summit Therapeutics' promising therapy, ivonescimab. These upcoming challenges are weighing on the stock, but for long-term investors, Merck remains attractive at its current levels. The company's subcutaneous (SC) version of Keytruda has already produced positive phase 3 results. This new formulation of the medicine will help extend its patent exclusivity into the next decade while taking on many of the original's indications. Why would the SC version find any success at all compared to the original, intravenous formulation? The answer is that SC Keytruda is easier and faster to administer. In a phase 3 study, it reduced the time patients spent in the administration chain and in the treatment room by 49.7% and 47.4%, respectively. It also simplified things for physicians, reducing the time they spend preparing and administering the medicine by 45.7%. Expect the new version to be massively successful, just like the old. And although ivonescimab could pose a challenge, it will take a long time for that medicine to get approvals and label expansions across the range of Keytruda's long list of indications. Meanwhile, Merck will continue to innovate. The company's brand-new approvals include Winrevair, a medicine for pulmonary arterial hypertension, and Enflonsia, a vaccine for the respiratory syncytial virus (RSV). Merck has a deep pipeline and generates substantial revenue and profits. It also offers a reliable dividend program. And the stock's forward price-to-earnings ratio was recently just 9.1, compared to an average of 16.3 for the broader healthcare industry, which includes companies other than pharmaceutical stocks. Merck's shares might be down significantly this year, but there is plenty of upside for investors willing to stay the course. Bristol Myers Squibb is facing the same problem, with the upcoming U.S. patent expiration for its cancer medicine Opdivo. And over the past few years, it has had to deal with the loss of patent exclusivity for Revlimid and Sprycel, two cancer drugs; the former used to be its top-selling product. Revenue moved in the wrong direction in the first quarter due to recent patent cliffs, but the company is also making terrific progress in the right direction. In December, BMS earned approval for a subcutaneous version of Opdivo, which will help mitigate the losses it will incur when that product faces biosimilar competition. Since 2019, BMS has secured a number of new approvals. One of the most important from that bunch was Reblozyl, a medicine for anemia in patients with beta-thalassemia. The company's growth portfolio, composed mostly of newer products, is doing well. In the first quarter, total revenue decreased by 6% year over year to $11.2 billion; however, the growth portfolio recorded sales of $5.6 billion, up 16% compared to the year-ago period. The drugmaker also has a robust pipeline that is expected to yield additional approvals. BMS may be facing challenges at present, but its recent approvals and ability to develop new products should help it navigate these difficult times. In the meantime, the stock appears to be significantly undervalued, with a forward P/E ratio of just 7. At current levels, Bristol Myers Squibb might be a steal. Down 17% so far this year, even with the headwinds it faces, the stock could deliver strong returns over the long run. Before you buy stock in Merck, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Merck wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $998,376!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb, Merck, and Summit Therapeutics. The Motley Fool has a disclosure policy. 2 Top Stocks Down 16% and 17% This Year to Buy and Hold was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
09-07-2025
- Business
- Reuters
Major deals involving U.S. drugmakers and biotechs over the past decade
July 9 (Reuters) - Merck (MRK.N), opens new tab is acquiring UK-based Verona Pharma for about $10 billion, as part of the U.S. drugmaker's strategy to diversify beyond its blockbuster cancer treatment Keytruda. The move adds to a growing list of high-profile transactions over the past decade by U.S. pharmaceutical companies to acquire promising therapies in fields ranging from oncology, neurology to rare diseases and obesity. Globally, $105.3 billion worth of pharmaceuticals and biotech M&A deals have been inked so far in 2025, according to data compiled by LSEG, up 7% from year-ago levels and the highest year-to-date total since 2023. Below are some of the major deals involving U.S.-based pharma and biotech firms from the past decade
Yahoo
09-07-2025
- Business
- Yahoo
Merck Strikes $10 Billion Deal to Buy Verona Pharma
Merck (MRK) on Wednesday agreed to acquire UK-based biopharmaceutical company Verona Pharma (VRNA) i Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-07-2025
- Business
- Yahoo
What You Need To Know Ahead of Merck's Earnings Release
Valued at a market cap of $204.3 billion, Merck & Co., Inc. (MRK) is a global healthcare company with a diverse portfolio spanning pharmaceuticals and animal health. Best known for its blockbuster cancer drug Keytruda, Merck has driven consistent growth through innovative therapies, strategic acquisitions, and global partnerships. The company is slated to announce its fiscal Q2 2025 earnings results before the market opens on Tuesday, Jul. 29. Ahead of the event, analysts expect the Rahway, New Jersey-based company to report an adjusted EPS of $2.04, down 10.5% from $2.28 in the year-ago quarter. However, the company has surpassed Wall Street's bottom-line estimates in the past four quarterly reports. Nvidia Scores Another Sovereign AI Win. How Should You Play NVDA Stock Here? Covered Call ETFs Are Popular, But My Favorite Options Trade Is Even Better This Underdog AI Stock Just Got a New Street-High Price Target Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. For fiscal 2025, analysts expect the pharmaceutical company to report adjusted EPS of $8.91, up 16.5% from $7.65 in fiscal 2024. Shares of MRK have decreased 34.1% over the past 52 weeks, underperforming both the S&P 500 Index's ($SPX) 12.3% rise and the Health Care Select Sector SPDR Fund's (XLV) 6.9% decline over the same period. Shares of Merck rose 1.4% on Apr. 24 after the company reported stronger-than-expected Q1 2025 adjusted EPS of $2.22. Despite a 2% drop in revenue to $15.5 billion, driven by a 41% decline in Gardasil sales to $1.3 billion due to paused shipments to China, sales still exceeded the forecast. Also, sales of Winrevair reached $280 million, and animal health revenue grew 5% to $1.6 billion. Additionally, Merck reaffirmed its 2025 revenue guidance of $64.1 billion - $65.6 billion, while slightly lowering its adjusted EPS outlook to $8.82 - $8.97, reflecting $200 million in tariff-related costs and a licensing charge tied to Hengrui Pharma. Analysts' consensus rating on Merck stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 24 analysts covering the stock, 12 recommend a "Strong Buy,' one has a "Moderate Buy" rating, and 11 give a "Hold" rating. This configuration is less bullish than three months ago, with 14 analysts suggesting a "Strong Buy." As of writing, the stock is trading below the average analyst price target of $103.68. On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
