MRK vs WST: Dividend Yield, Growth & Safety Comparison
Merck & Co., Inc. (MRK) and West Pharmaceutical Services Inc (WST) are both in the Health Care sector, making them natural rivals for dividend investors. MRK offers a significantly higher 2.77% yield compared to WST's 0.34%, a gap of 2.42%. For dividend growth, WST leads with a 5-year CAGR of 13.1% 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 | WST |
|---|
| Dividend Yield | 2.77% | 0.34% |
| Annual Dividend | $3.24 | $0.84 |
| 5-Year CAGR | 5.9% | 13.1% |
| Payout Ratio | 45% | 12% |
| Consecutive Years | 15 | 0 |
| Price | $121.49 | $248.03 |
Yield Comparison
Merck & Co., Inc. (MRK) currently yields 2.77%, which is solid for the broader market. That's 2.42% more than West Pharmaceutical Services Inc (WST), which yields 0.34%. In dollar terms, MRK pays $3.24/share annually versus WST's $0.84/share.
Dividend Growth
Over the past five years, WST has grown its dividend at a 13.1% 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%. WST: Dividend growth is accelerating — the 3-year CAGR of 21.1% exceeds the 5-year rate of 13.1% and the 10-year rate of 9.7%.
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. WST's dividend safety is rated "Safe." The payout ratio of 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x. WST's payout ratio of 12% 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 $34/year from WST — a difference of $243/year. At $100,000, that gap widens to $2430/year.
Verdict
- Best for income: MRK
- Best for growth: WST
- Best for safety: WST
Frequently Asked Questions
Which has a higher dividend yield, MRK or WST?
Merck & Co., Inc. (MRK) has a higher dividend yield of 2.77% compared to West Pharmaceutical Services Inc (WST) at 0.34%.
Is MRK or WST a better dividend growth stock?
West Pharmaceutical Services Inc has the stronger dividend growth with a 5-year CAGR of 13.1%, compared to Merck & Co., Inc.'s 5.9%.
Which is safer for dividend income, MRK or WST?
Merck & Co., Inc.'s dividend safety is rated "Safe" while West Pharmaceutical Services 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 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x.
How much income does $10,000 in MRK vs WST generate?
A $10,000 investment in MRK generates approximately $277/year in dividends, while the same amount in WST generates about $34/year.
Is MRK or WST a Dividend Aristocrat?
Merck & Co., Inc. is a Dividend Contender with 15 consecutive years of increases. West Pharmaceutical Services Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, MRK or WST?
West Pharmaceutical Services Inc has a lower payout ratio of 12% compared to Merck & Co., Inc.'s 45%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MRK vs WST: which is better for retirement income?
It depends on your priorities. MRK for current income, WST for dividend growth, WST for safety. Many retirement investors hold both for diversification.
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