Merck & Company (MRK) Buy, Sell or Hold

Merck & Company (MRK)

143.93

-0.78 (0.54%)

as of Sep 11, 2026, 8:00:00 pm Market Open.

311 watching

DON'T BUY

Fine company and reasonably valued but not as cheap as others that he owns. Decent dividend but not anything he would rush into. Still a little uncertainty over the healthcare sector and particularly with this one's pipeline area. Consider Abbott Labs (ABT-N), which has more growth potential.

COMMENT

Took over Schering-Plough in 2009, which expanded their pipeline of pharmaceuticals, drugs, etc. Pays about 4% yield so likes it from an income standpoint. With a 40% payout ratio dividend is relatively safe. Might not give you growth that you would like. If you think economy is going to grind higher, health care is not a sector to be in.

PAST TOP PICK

(A Top Pick Aug 19/09. Up 15.9%.) Merged with Schering-Plough and the combination produced a pipeline that is incomparable in the Pharma sector. Will have sustainable growth for many years to come.

PAST TOP PICK

(A Top Pick May 15/09. Up 46.13%.) (Think this should be Aug 19 and up 12.2%, not May 15 as BNN shows. Bill) Starting to trim out of this one.

DON'T BUY

3rd largest pharmaceutical behind Johnson & Johnson (JNJ-N) and Pfizer (PFE-N). We are in an economic recovery and if this continues and there is no double dip, health-care stocks and consumer staples won't necessarily be your best performers.

DON'T BUY

Pfizer (PFE-N) and Merck (MRK-N) are pretty fully priced at current levels. Growth prospects are not that great, especially with a lot of drugs coming off patent. Multiple looks attractive and dividend looks okay but there are better places to go in pharmaceuticals. Prefers Abbott Labs (ABT-N).

BUY

Large-cap pharmaceuticals are probably the best valuation out there. Their recent merger is all done. An excellent buy at this level.

DON'T BUY

Patent expirations is a problem with all Pharma plays and pure pharmaceuticals are in a difficult position.

COMMENT

Dividend of around 5%. Cash rich so not concerned about a short-term cash burn. The rate of drugs that big pharma can bring to market is slowing down. Could be $36 in 12 months but if you're not happy with that you should look elsewhere.

SELL

Finalizing the merger with Schering-Plough (SGP-N). Good dividend yield and low PE ratio, which is a value trap because of huge headwinds ahead of them as drugs go off patent protection. Growth will be difficult. Prefers Johnson & Johnson (JNJ-N) because of the medical devices and consumer healthcare. Also Abbott Labs (ABT-N) would be another consideration.

COMMENT

Pharmaceutical. More disciplined approach so they've been generating very strong free cash flow. A couple of their strong drugs will be coming off patent in a couple of years. In the process of merging with Schering-Plough (SGP-N). If you were going to pick a name, he would prefer Abbott (ABT-N). 5% dividend yield.

TOP PICK

Merging with Schering-Plough (SGP-N). Combination will create a very strong pipeline of products, which for many years will have a good growth profile. It will merge short to mid cycle products with longer-term type products and thinks there are significant synergy type benefits. You could also own Schering-Plough, which is a discounted way of playing this. (See also SGP-N.)

DON'T BUY

Has opportunities as a defensive stock. There is significant government regulation coming. There will likely be price controls. There is some risk. Might buy for the dividend.

BUY

Prefers Pfizer (PFE-N) even though in the near term this company has outperformed them. If you are looking to own a pharmaceutical, this is a fine name.

DON'T BUY

Model price is $48.07, a negative 7.5% differential.

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Merck & Company (MRK)