LLY vs MRK: Dividend Yield, Growth & Safety Comparison
ELI LILLY & Co (LLY) and Merck & Co., Inc. (MRK) are both in the Health Care sector, making them natural rivals for dividend investors. MRK offers a significantly higher 2.77% yield compared to LLY's 0.59%, a gap of 2.18%. For dividend growth, LLY leads with a 5-year CAGR of 23.8% versus MRK's 5.9%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Contenders.
Key Metrics Comparison
| Metric | LLY | MRK |
|---|
| Dividend Yield | 0.59% | 2.77% |
| Annual Dividend | $6.00 | $3.24 |
| 5-Year CAGR | 23.8% | 5.9% |
| Payout Ratio | 26% | 45% |
| Consecutive Years | 11 | 15 |
| Price | $1045.09 | $121.49 |
Yield Comparison
Merck & Co., Inc. (MRK) currently yields 2.77%, which is solid for the broader market. That's 2.18% more than ELI LILLY & Co (LLY), which yields 0.59%. In dollar terms, MRK pays $3.24/share annually versus LLY's $6.00/share.
Dividend Growth
Over the past five years, LLY has grown its dividend at a 23.8% CAGR compared to MRK's 5.9%. LLY: Dividend growth is slowing — the 3-year CAGR of 15.2% trails the 5-year rate of 23.8% and the 10-year rate of 16.4%. 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
LLY's dividend safety is rated "Safe." The payout ratio of 26% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.8x. 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. LLY's payout ratio of 26% is more conservative than MRK's 45%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MRK generates approximately $277/year in dividend income, compared to $59/year from LLY — a difference of $218/year. At $100,000, that gap widens to $2180/year.
Verdict
- Best for income: MRK
- Best for growth: LLY
- Best for safety: LLY
Frequently Asked Questions
Which has a higher dividend yield, LLY or MRK?
Merck & Co., Inc. (MRK) has a higher dividend yield of 2.77% compared to ELI LILLY & Co (LLY) at 0.59%.
Is LLY or MRK a better dividend growth stock?
ELI LILLY & Co has the stronger dividend growth with a 5-year CAGR of 23.8%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, LLY or MRK?
ELI LILLY & Co's dividend safety is rated "Safe" while Merck & Co., Inc. is rated "Safe." The payout ratio of 26% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.8x. 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 LLY vs MRK generate?
A $10,000 investment in LLY generates approximately $59/year in dividends, while the same amount in MRK generates about $277/year.
Is LLY or MRK a Dividend Aristocrat?
ELI LILLY & Co is a Dividend Contender (11 years) and Merck & Co., Inc. is a Dividend Contender (15 years).
Which has a lower payout ratio, LLY or MRK?
ELI LILLY & Co has a lower payout ratio of 26% compared to Merck & Co., Inc.'s 45%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
LLY vs MRK: which is better for retirement income?
It depends on your priorities. MRK for current income, LLY for dividend growth, LLY for safety. Many retirement investors hold both for diversification.
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