September 28, 2025 a 07:31 am
MRK: Dividend Analysis - Merck & Co., Inc.
Merck & Co., Inc. showcases a robust dividend profile with a history of stable and gradually increasing dividend payouts over 56 consecutive years. This highlights the company's commitment to returning value to shareholders while maintaining a balanced approach to growth. With a dividend yield of nearly 4%, Merck offers an attractive income option for investors seeking both stability and yield.
📊 Overview
Merck operates within the healthcare sector, renowned for its consistent dividend policy and a commitment to maintaining shareholder value. Below is an overview of Merck's recent dividend metrics.
| Metric | Detail |
|---|---|
| Sector | Healthcare |
| Dividend yield | 3.9990% |
| Current dividend per share | 3.10 USD |
| Dividend history | 56 years |
| Last cut or suspension | None |
🗣️ Dividend History
The longevity of Merck's dividend history is exemplary, showcasing a commitment to shareholder returns. This consistent history is critical for income-focused investors seeking reliability.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 2.43 |
| 2024 | 3.12 |
| 2023 | 2.96 |
| 2022 | 2.80 |
| 2021 | 2.61 |
📈 Dividend Growth
Merck has shown a consistent growth trajectory in its dividend disbursements, crucial for investors who focus on long-term income growth.
| Time | Growth |
|---|---|
| 3 years | 6.13% |
| 5 years | 7.67% |
The average dividend growth is 7.67% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is a critical indicator of how much profit is returned to shareholders versus reinvested in the company. Merck's payout ratios ensure a balanced approach.
| Key figure ratio | Percentage |
|---|---|
| EPS-based | 47.24% |
| Free cash flow-based | 52.53% |
A payout ratio of 47.24% (EPS) and 52.53% (FCF) indicates a healthy balance between returning profits to shareholders and retaining earnings for sustainable growth.
📊 Cashflow & Capital Efficiency
Evaluating Merck's cash flow and capital efficiency highlights its ability to generate and utilize cash effectively, ensuring dividends and future growth potential.
| Metric | 2023 | 2024 |
|---|---|---|
| Free Cash Flow Yield | 3.22% | 7.18% |
| Earnings Yield | 0.13% | 6.80% |
| CAPEX to Operating Cash Flow | 29.70% | 15.71% |
| Stock-based Compensation to Revenue | 1.07% | 1.19% |
| Free Cash Flow / Operating Cash Flow Ratio | 70.30% | 84.29% |
Merck's cash flow ratios suggest robust cash generation and capital efficiency, supporting its dividend policy and growth initiatives effectively.
📉 Balance Sheet & Leverage Analysis
The balance sheet health and leverage metrics provide insights into Merck's financial stability, liquidity, and debt management strategies.
| Metric | 2023 | 2024 |
|---|---|---|
| Debt-to-Equity | 96.51% | 82.63% |
| Debt-to-Assets | 34.00% | 32.68% |
| Debt-to-Capital | 49.11% | 45.25% |
| Net Debt to EBITDA | 4.26x | 0.97x |
| Current Ratio | 1.25 | 1.36 |
| Quick Ratio | 1.00 | 1.15 |
| Financial Leverage | 2.84x | 2.53x |
Merck maintains a healthy balance sheet with manageable leverage levels, demonstrating strong financial resilience and effective debt management.
📈 Fundamental Strength & Profitability
An analysis of Merck's fundamental and profitability metrics reveals its operational efficiency and ability to sustain its growth and dividend strategy.
| Metric | 2023 | 2024 |
|---|---|---|
| Return on Equity | 0.97% | 0.37% |
| Return on Assets | 0.34% | 0.15% |
| Margins: Net | 0.61% | 26.68% |
| EBIT | 5.05% | 33.05% |
| EBITDA | 11.49% | 40.06% |
| Gross | 73.17% | 76.32% |
| R&D to Revenue | 50.79% | 27.95% |
Merck demonstrates strong profitability and asset utilization, underpinned by a robust research and development focus, reinforcing its competitive edge and dividend sustainability.
🔍 Price Development & Analysis
🏆 Dividend Scoring System
The Dividend Scoring System assesses Merck against a set of critical dividend-related criteria to provide a holistic evaluation of its dividend strength.
| Category | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 36 / 40
🔔 Rating
Merck & Co., Inc. stands as an exemplary entity within the healthcare sector, offering a stable and growing dividend with strong financial health and strategic management. The robust dividend history and security imply a favorable outlook for dividend-focused investors.