MRK vs UNH: Dividend Yield, Growth & Safety Comparison
Merck & Co., Inc. (MRK) and Unitedhealth Group Inc (UNH) are both in the Health Care sector, making them natural rivals for dividend investors. UNH edges ahead on yield at 3.20% versus MRK's 2.77%. For dividend growth, UNH leads with a 5-year CAGR of 11.7% versus MRK's 5.9%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Contenders.
Key Metrics Comparison
| Metric | MRK | UNH |
|---|
| Dividend Yield | 2.77% | 3.20% |
| Annual Dividend | $3.24 | $8.73 |
| 5-Year CAGR | 5.9% | 11.7% |
| Payout Ratio | 45% | 45% |
| Consecutive Years | 15 | 16 |
| Price | $121.49 | $291.12 |
Yield Comparison
Unitedhealth Group Inc (UNH) currently yields 3.20%, which is solid for the broader market. That's 0.43% more than Merck & Co., Inc. (MRK), which yields 2.77%. In dollar terms, UNH pays $8.73/share annually versus MRK's $3.24/share.
Dividend Growth
Over the past five years, UNH has grown its dividend at a 11.7% 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%. UNH: Dividend growth is slowing — the 3-year CAGR of 9.4% trails the 5-year rate of 11.7% and the 10-year rate of 15.6%.
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. UNH'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. Both have similar payout ratios — MRK at 45% and UNH at 45%.
Income Comparison
A $10,000 investment in UNH generates approximately $320/year in dividend income, compared to $277/year from MRK — a difference of $43/year. At $100,000, that gap widens to $430/year.
Verdict
- Best for income: UNH
- Best for growth: UNH
Frequently Asked Questions
Which has a higher dividend yield, MRK or UNH?
Unitedhealth Group Inc (UNH) has a higher dividend yield of 3.20% compared to Merck & Co., Inc. (MRK) at 2.77%.
Is MRK or UNH a better dividend growth stock?
Unitedhealth Group Inc has the stronger dividend growth with a 5-year CAGR of 11.7%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, MRK or UNH?
Merck & Co., Inc.'s dividend safety is rated "Safe" while Unitedhealth Group 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 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
How much income does $10,000 in MRK vs UNH generate?
A $10,000 investment in MRK generates approximately $277/year in dividends, while the same amount in UNH generates about $320/year.
Is MRK or UNH a Dividend Aristocrat?
Merck & Co., Inc. is a Dividend Contender (15 years) and Unitedhealth Group Inc is a Dividend Contender (16 years).
Which has a lower payout ratio, MRK or UNH?
Unitedhealth Group Inc has a lower payout ratio of 45% compared to Merck & Co., Inc.'s 45%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MRK vs UNH: which is better for retirement income?
It depends on your priorities. UNH for current income, UNH for dividend growth. Many retirement investors hold both for diversification.
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