NYSE:MRK

Merck & Company (MRK)

147.24
-2.64 (1.76%)
as of Oct 22, 2026, 8:00:00 pm Market Closed.
311 watching
0
DON'T BUY

Trading at about 12X earnings which is not really expensive. Has over 3% dividend. The problem is that most people don’t expect the earnings to grow and are actually going to decline over the next few years. Would prefer Abbot Labs (ABT-N) or Teva Pharmaceuticals (TEVA-N).

HOLD

Chart shows a long, long sideways market followed by an outstanding pop. Chart is showing a parabolic move but the trend is up. Typically when a stock moves quite a bit off a trend line, be prepared that it could return to the trend line. If you are a longer-term investor, stay with the story as long as it doesn’t break the trend line.

COMMENT

US health care valuations are very, very attractive. They have reasonable PE’s and good dividends. This is all about the 3.8% dividend. He would prefer something with a cheaper valuation and better dividend growth.

COMMENT
On a seasonal pattern, healthcare stocks should do well coming into the summer months. This one has kind of marked time for a few months. Nice dividend at 4.3%. (See Top Picks.)
WEAK BUY
Likes the group, nice dividends. They trade at a discount. There are concerns about generic competition and blockbuster drugs coming off patients. But he sees that as built into the price and MRK is attractive to invest in. He has preferred some other companies in the space over MRK.
DON'T BUY
No drug pipeline that PFE has. Jut doesn’t have the future growth, so he prefers PFE. Bristol Myers would be a second choice with a good pipeline.
BUY
Every Canadian should have exposure to health care and it is very hard to get this in Canada. Not his favourite name but you can’t go too far wrong. Earnings are finally recovering. Good dividend growth. There is a lack of new drugs, but they will come, over time.
PAST TOP PICK
(Top Pick Feb 17/11, Up 21.55%) Still likes it.
DON'T BUY
Still relatively inexpensive. They are in restrained growth at this point. Has come off recently because all of the pharmas had a pretty strong year last year and people are shifting into the more resource stocks. It's a defensive stock so there is slower growth.
BUY
Pharma: The trend is really looking quite good. Hasn’t looked at Merck in a while. There was a time when it was 0% return for 10 years. Now, it is in the right sector and it is moving.
PAST TOP PICK
(A TOP PICK Feb 17/11. Up 21.17%.) Still likes but doesn't see as much upside this year.
BUY
An attractive buy. He prefers Abbott Labs (ABT-N), which has growing earnings and is diversified into other products such as medical devices, pharmaceuticals and nutritionals. Terrific dividend. Starting to get attention from value investors.
DON'T BUY
Bit of a poster boy for the whole pharma industry. Something like a leaky boat in that you are rowing and making progress, but constantly bailing. Because of patent expiration, it is very difficult for these companies to create a growth profile.
COMMENT
Has started buying into this sector on the ones that are trading at 10X multiples.
TOP PICK
Model price is $50.75, a 40% upside. Came up 8%-10% in the last couple of weeks, but still has a long ways to go. 4.2% dividend.
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