MRK vs PFE: Dividend Yield, Growth & Safety Comparison
Merck & Co., Inc. (MRK) and Pfizer Inc (PFE) are both in the Health Care sector, making them natural rivals for dividend investors. PFE offers a significantly higher 6.23% yield compared to MRK's 2.77%, a gap of 3.46%. For dividend growth, PFE leads with a 5-year CAGR of 10.1% versus MRK's 5.9%. Both stocks carry a "Safe" dividend safety rating. MRK is a Dividend Contender with 15 years of consecutive increases.
Key Metrics Comparison
| Metric | MRK | PFE |
|---|
| Dividend Yield | 2.77% | 6.23% |
| Annual Dividend | $3.24 | $1.72 |
| 5-Year CAGR | 5.9% | 10.1% |
| Payout Ratio | 45% | 1% |
| Consecutive Years | 15 | 0 |
| Price | $121.49 | $27.80 |
Yield Comparison
Pfizer Inc (PFE) currently yields 6.23%, which is attractive for the broader market. That's 3.46% more than Merck & Co., Inc. (MRK), which yields 2.77%. In dollar terms, PFE pays $1.72/share annually versus MRK's $3.24/share.
Dividend Growth
Over the past five years, PFE has grown its dividend at a 10.1% CAGR compared to MRK's 5.9%. 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%. PFE: Dividend growth is accelerating — the 3-year CAGR of 18.3% exceeds the 5-year rate of 10.1% and the 10-year rate of 8.1%.
Dividend Safety
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. PFE's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. PFE's payout ratio of 1% is more conservative than MRK's 45%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in PFE generates approximately $623/year in dividend income, compared to $277/year from MRK — a difference of $346/year. At $100,000, that gap widens to $3460/year.
Verdict
- Best for income: PFE
- Best for growth: PFE
- Best for safety: PFE
Frequently Asked Questions
Which has a higher dividend yield, MRK or PFE?
Pfizer Inc (PFE) has a higher dividend yield of 6.23% compared to Merck & Co., Inc. (MRK) at 2.77%.
Is MRK or PFE a better dividend growth stock?
Pfizer Inc has the stronger dividend growth with a 5-year CAGR of 10.1%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, MRK or PFE?
Merck & Co., Inc.'s dividend safety is rated "Safe" while Pfizer Inc is rated "Safe." The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x. The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x.
How much income does $10,000 in MRK vs PFE generate?
A $10,000 investment in MRK generates approximately $277/year in dividends, while the same amount in PFE generates about $623/year.
Is MRK or PFE a Dividend Aristocrat?
Merck & Co., Inc. is a Dividend Contender with 15 consecutive years of increases. Pfizer Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, MRK or PFE?
Pfizer Inc has a lower payout ratio of 1% compared to Merck & Co., Inc.'s 45%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MRK vs PFE: which is better for retirement income?
It depends on your priorities. PFE for current income, PFE for dividend growth, PFE for safety. Many retirement investors hold both for diversification.
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