This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Best Dow Dividend Stocks for 2011

6. Merck (MRK - Get Report) is a global pharmaceutical company.

12-Month Sales Growth: 88%
12-Month Net Income Growth: -2%
Quarterly Operating Profit Margin: 30%
Cash Flow Multiple: 12 (7% peer premium)
Analysts' Median Target: $41.65
3-Year Dividend Growth: 0%
Dividend Yield: 4.2%
Payout Ratio: 54%

2011 Catalyst: Merck is a solid dividend stock. Its 4.2% yield is third-highest in the blue-chip Dow. However, it hasn't increased the distribution since 2004. As with Pfizer, patent expiry is a concern.

However, analysts see value in Merck shares. A forward earnings multiple of 9.4, a book value multiple of 2 and a sales multiple of 2.5 represent 20%, 61% and 22% industry discounts. The 2009 purchase of Schering-Plough has bolstered earnings, but one-time charges have plagued recent results, most recently, a $950 million reserve related to a recall.

Emerging markets are a growth venue. That geographic segment added 18% of quarterly sales.

Bullish Scenario: Deutsche Bank forecasts that Merck's stock will advance 34% to $48.

Bearish Scenario: Jefferies values the shares at $37.80, implying 5% of upside.
6 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CVX $90.19 -0.75%
JPM $67.31 0.67%
HPQ $12.83 1.50%
KO $43.21 0.42%
MSFT $54.06 0.70%


Chart of I:DJI
DOW 17,822.98 +9.59 0.05%
S&P 500 2,091.49 +2.62 0.13%
NASDAQ 5,127.0750 +10.9320 0.21%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs