Will Merck (MRK) Stock Be Helped by Dividend Hike? - TheStreet

NEW YORK (TheStreet) -- Merck (MRK) - Get Report stock is lower by 1.33% to $53.29 in afternoon trading on Tuesday, even though the company is raising its quarterly dividend.

Merck's board has approved a 1 cent increase in its quarterly dividend payout, to 46 cents per share from 45 cents per share.

The dividend is payable on January 8 to shareholders of record as of December 15.

"The increase in our dividend reflects confidence in our future and our ongoing commitment to creating value for shareholders," CEO Kenneth Frazier said in a statement.

The company last hiked its dividend, to 45 cents from 44 cents, in November of 2014, according to a statement.

Merck is a global health care company based in Kenilworth, NJ.

Separately, TheStreet Ratings team rates MERCK & CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate MERCK & CO (MRK) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 104.0% when compared to the same quarter one year prior, rising from $895.00 million to $1,826.00 million.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Pharmaceuticals industry and the overall market, MERCK & CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for MERCK & CO is currently very high, coming in at 78.75%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MRK's net profit margin of 18.12% significantly trails the industry average.
  • You can view the full analysis from the report here: MRK

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.