AMGN vs MRK: Dividend Yield, Growth & Safety Comparison
Amgen Inc (AMGN) and Merck & Co., Inc. (MRK) are both in the Health Care sector, making them natural rivals for dividend investors. Both stocks offer similar yields — AMGN at 2.61% and MRK at 2.77%. For dividend growth, AMGN leads with a 5-year CAGR of 15.9% versus MRK's 5.9%. MRK holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Contenders.
Key Metrics Comparison
| Metric | AMGN | MRK |
|---|
| Dividend Yield | 2.61% | 2.77% |
| Annual Dividend | $9.52 | $3.24 |
| 5-Year CAGR | 15.9% | 5.9% |
| Payout Ratio | 67% | 45% |
| Consecutive Years | 14 | 15 |
| Price | $369.70 | $121.49 |
Yield Comparison
Merck & Co., Inc. (MRK) currently yields 2.77%, which is solid for the broader market. That's 0.15% more than Amgen Inc (AMGN), which yields 2.61%. In dollar terms, MRK pays $3.24/share annually versus AMGN's $9.52/share.
Dividend Growth
Over the past five years, AMGN has grown its dividend at a 15.9% CAGR compared to MRK's 5.9%. AMGN: Dividend growth is slowing — the 3-year CAGR of 5.7% trails the 5-year rate of 15.9% and the 10-year rate of 13.7%. MRK: Dividend growth is slowing — the 3-year CAGR of 5.3% trails the 5-year rate of 5.9% and the 10-year rate of 7.1%.
Dividend Safety
AMGN's dividend safety is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. MRK's dividend safety is rated "Safe." The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x. MRK's payout ratio of 45% is more conservative than AMGN's 67%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MRK generates approximately $277/year in dividend income, compared to $261/year from AMGN — a difference of $16/year. At $100,000, that gap widens to $160/year.
Verdict
- Best for income: MRK
- Best for growth: AMGN
- Best for safety: MRK
Frequently Asked Questions
Which has a higher dividend yield, AMGN or MRK?
Merck & Co., Inc. (MRK) has a higher dividend yield of 2.77% compared to Amgen Inc (AMGN) at 2.61%.
Is AMGN or MRK a better dividend growth stock?
Amgen Inc has the stronger dividend growth with a 5-year CAGR of 15.9%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, AMGN or MRK?
Amgen Inc's dividend safety is rated "Moderate" while Merck & Co., Inc. is rated "Safe." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
How much income does $10,000 in AMGN vs MRK generate?
A $10,000 investment in AMGN generates approximately $261/year in dividends, while the same amount in MRK generates about $277/year.
Is AMGN or MRK a Dividend Aristocrat?
Amgen Inc is a Dividend Contender (14 years) and Merck & Co., Inc. is a Dividend Contender (15 years).
Which has a lower payout ratio, AMGN or MRK?
Merck & Co., Inc. has a lower payout ratio of 45% compared to Amgen Inc's 67%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AMGN vs MRK: which is better for retirement income?
It depends on your priorities. MRK for current income, AMGN for dividend growth, MRK for safety. Many retirement investors hold both for diversification.
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