BMY vs MRK: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | BMY | MRK |
|---|
| Dividend Yield | 4.09% | 2.77% |
| Annual Dividend | $2.49 | $3.24 |
| 5-Year CAGR | 14.0% | 5.9% |
| Payout Ratio | 72% | 45% |
| Consecutive Years | 0 | 15 |
| Price | $60.77 | $121.49 |
Yield Comparison
Bristol Myers Squibb Co (BMY) currently yields 4.09%, which is attractive for the broader market. That's 1.33% more than Merck & Co., Inc. (MRK), which yields 2.77%. In dollar terms, BMY pays $2.49/share annually versus MRK's $3.24/share.
Dividend Growth
Over the past five years, BMY has grown its dividend at a 14.0% CAGR compared to MRK's 5.9%. 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's dividend safety is rated "Moderate." 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'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 BMY's 72%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in BMY generates approximately $409/year in dividend income, compared to $277/year from MRK — a difference of $132/year. At $100,000, that gap widens to $1320/year.
Verdict
- Best for income: BMY
- Best for growth: BMY
- Best for safety: MRK
Frequently Asked Questions
Which has a higher dividend yield, BMY or MRK?
Bristol Myers Squibb Co (BMY) has a higher dividend yield of 4.09% compared to Merck & Co., Inc. (MRK) at 2.77%.
Is BMY or MRK a better dividend growth stock?
Bristol Myers Squibb Co has the stronger dividend growth with a 5-year CAGR of 14.0%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, BMY or MRK?
Bristol Myers Squibb Co's dividend safety is rated "Moderate" while Merck & Co., Inc. is rated "Safe." 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. 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 BMY vs MRK generate?
A $10,000 investment in BMY generates approximately $409/year in dividends, while the same amount in MRK generates about $277/year.
Is BMY or MRK a Dividend Aristocrat?
Merck & Co., Inc. is a Dividend Contender with 15 consecutive years of increases. Bristol Myers Squibb Co does not currently qualify for aristocrat status.
Which has a lower payout ratio, BMY or MRK?
Merck & Co., Inc. has a lower payout ratio of 45% compared to Bristol Myers Squibb Co's 72%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BMY vs MRK: which is better for retirement income?
It depends on your priorities. BMY for current income, BMY for dividend growth, MRK for safety. Many retirement investors hold both for diversification.
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