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Stocks in this article: MRK VZ T INTC DD

Merck

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Along with the rest of the pharmaceutical industry, Merck ( MRK) is having a good year in 2013. Shares of the $143 billion big pharma company have rallied more than 16% year-to-date, besting the S&P 500's impressive performance by about 100 basis points. Then, tack on a 3.61% dividend yield to the equation.

>>5 Summer Buy Signals From the Health Care Sector

Merck has been busy in recent years. While the guillotine of patent drop-offs has been edging closer and closer to big pharma's neck, Merck has been hard at work adding attractive new products to its pipeline -- and bringing them to market. While the firm already lost patent protection on its blockbuster asthma drug Singulair in August 2012, the loss is being offset by newcomers such as diabetes drug Januvia and HPV vaccine Gardasil. Merck is considerably U.S.-biased; the firm still earns half of its revenues stateside, a fact that should get a boost from healthcare initiatives that increase access to pharmaceuticals.

With a net cash and investment position of almost $8 billion, Merck has the wherewithal to keep on building its pipeline without turning to the capital markets. The firm's hefty net margins should keep those coffers stuffed in 2013 and beyond.

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