BMY vs MRK: Dividend Comparison
Dividend data as of
Bristol Myers Squibb Co (BMY) and Merck & Co., Inc. (MRK) are both in the Health Care sector, making them natural rivals for dividend investors. BMY offers a significantly higher 4.09% yield compared to MRK's 2.77%, a gap of 1.33%. For dividend growth, BMY leads with a 5-year CAGR of 14.0% versus MRK's 5.9%. MRK holds the edge in dividend safety with a "Safe" rating. MRK is a Dividend Contender with 15 years of consecutive increases.
Verdict
Yield Analysis
BMY yields 1.33% more than MRK. In dollar terms, BMY pays $2.49/share vs MRK's $3.24/share annually.
Dividend Growth
BMY: Dividend growth is accelerating — the 3-year CAGR of 20.4% exceeds the 5-year rate of 14.0% and the 10-year rate of 9.0%.
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
BMY: The payout ratio of 72% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
MRK: The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in BMY vs MRK today?
At $60.77 per share, $10,000 buys about 164.5 shares of Bristol Myers Squibb Co (BMY). Each share pays $2.49 per year in dividends, so the position starts out generating roughly $410 per year — about $34 a month.
At $121.49 per share, $10,000 buys about 82.3 shares of Merck & Co., Inc. (MRK). Each share pays $3.24 per year in dividends, so the position starts out generating roughly $267 per year — about $22 a month.
BMY is the larger income stream from day one: $143 per year more on the same $10,000 invested.
What could $10,000 of BMY or MRK income look like in 10 years?
Bristol Myers Squibb Co (BMY) has raised its dividend about 14.0% a year over the past five years. If that pace held, the $409 per year that $10,000 generates today at the current 4.09% yield would reach $1,513 per year by 2036 — a 15.1% yield on the original cost.
Merck & Co., Inc. (MRK) has raised its dividend about 5.9% a year over the past five years. If that pace held, the $277 per year that $10,000 generates today at the current 2.77% yield would reach $490 per year by 2036 — a 4.9% yield on the original cost.
On those trailing rates, BMY pays more in 2036: $1,513 versus $490 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would MRK's dividend growth overtake BMY's higher yield?
It doesn't, on the trailing numbers. Bristol Myers Squibb Co (BMY) yields more today (4.09% vs 2.77%) and has also grown its dividend at least as fast (14.0% vs 5.9% a year over five years). Unless MRK accelerates its raises or BMY stumbles, MRK never closes the income gap — BMY wins on both current income and growth.
Can BMY and MRK afford their dividends?
Bristol Myers Squibb Co (BMY) earns $3.46 per share against $2.49 paid out in dividends — 1.4x coverage (a 72% payout ratio).
Merck & Co., Inc. (MRK) earns $7.28 per share against $3.24 paid out in dividends — 2.2x coverage (a 45% payout ratio).
MRK's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for BMY if earnings weaken.
Which fits an early-retirement income portfolio better, BMY or MRK?
For income you need right now, Bristol Myers Squibb Co (BMY) leads: $100,000 invested today pays about $341 a month at the current 4.09% yield, versus $230 a month from Merck & Co., Inc. (MRK) at 2.77%.
BMY also leads on dividend growth (14.0% vs 5.9% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: MRK has raised its dividend 15 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $2,259/yr in BMY vs $643/yr in MRK by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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