Market Overview

3 Reasons To Buy Merck For The Long Term

Related MRK
Market Mixed Amid Plan To Spend $300 Million On Ebola Vaccines
These 4 Charts Highlight Twitter Sentiment For Today's Movers
Making Money With Charles Payne: 12/8/14 (Fox Business)

Merck (NYSE: MRK) is a blue chip "Big Pharma" stock that is up for the last week, month, quarter, six months and year of market action.

For 2014, Merck has risen by nearly 19 percent. There are three reasons for long-term investors to buy shares of Merck in expectation that the share price will increase even more.

Merck Has A Solid Pipeline Of Products And Services

The bullish trajectory of its earnings is testament to that. Earnings per share for Merck for the last five years was a -16.50 percent. This year, it is even worse at a -26.50 percent.

Next year, however, earnings-per-share are expected to jump to 4.55 percent. For the next five years, earnings per share for Merck are expected to be at almost 4 percent.

Related: Reasons To Buy Cracker Barrel On The Dip

It's On A Bullish Trend

The dividend component of Merck also makes it appealing for long-term investors. At present, the dividend yield for a member of the Standard & Poor's 500 Index averages about 1.8 percent. The dividend yield for Merck is 3 percent, more than 50 percent higher. Income investors should also like that Merck is a Dividend Aristocrat. That means the company has increased its dividend yield annually for at least the last 25 years. From that, shareholders get a raise each year just for owning the stock.

Demographics Favor Merck

The world is getting older and richer. That change results in more spending on healthcare goods and services. From that, Merck will prosper.

Merck is now trading around $57.85. The mean analyst target price for the next year of market action is $60.94. Making the future look even more bullish is that Merck has a tiny short float, evincing that few expert the price to fall.

Posted-In: healthcare medicineLong Ideas Dividends Emerging Markets Technicals Markets Trading Ideas Best of Benzinga

 

Related Articles (SPY + MRK)

Around the Web, We're Loving...

Get Benzinga's Newsletters