Merck Stock
Merck stock is a leading company offering products for human and animal health care. Merck may be best known for Pharmaceutical division, which offers health pharmaceutical products for both therapeutic and preventive means. Few may know the market share that Merck holds in providing immensely important vaccines. With the recent marketing blitz, consumers may be aware that Merck manufactures the vaccine against Human Papillomavirus, Gardasil, for protection against cervical cancer. 1998-2008 have been difficult for long term Merck investors who saw the stock lose nearly 50% of its market value (not including dividends). The headquarters for Merck stock is in Whitehouse Station, New Jersey. Merck stock symbol is MRK and is traded on the New York Stock Exchange (NYSE).
Merck stock is buoyed by many other strong products, besides Gardasil. Its largest products include Singulair which treats asthma/allergies); Januvia helping those with diabetes; and Cozaar & Hyzaar for hypertension. Merck also works with the popular drugs Vytorin and Zetia with Schering-Plough Corp (NYSE: SGP). The main risks for Merck surround the development of new drugs, the effectiveness of its existing drugs versus competitors, and the loss of intellectual property rights to generic competitors. There is also, as will all pharmaceutical companies, the risk of pending and new litigation by patients with adverse effects from its products. Merck stock investors face significant outstanding litigation from its Vioxx drug, pulled in 2004. There does seem to be some momentum around establishing a fund (around $5 billion) to settle these class action claims.
Given Merck’s extreme decline and its healthy dividend (nearly 4% during June 2008), it is garnering renewed attention from long term investors. Merck stock earnings did increase 27% from 2006 to 2007, but gains in 2008 should be much more marginal (3%), before adjusting meaningfully upward in 2009. Merck’s P/E remains attractive and may peak the interest of equity investors. Many of its peers, however, like Pfizer stock and Amgen (NASDAQ: AMGN) have also lost significant value and offer an attractive mix of growth and value.