Dow Today: Verizon Communications (VZ) Leads The Day Higher, Merck (MRK) Lags

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

The Dow Jones Industrial Average ( ^DJI) is trading up 85 points (+0.6%) at 13,945 as of Friday, Feb 1, 2013, 9:35 a.m. ET. During this time, 35.9 million shares of the 30 Dow components have changed hands vs. an average daily trading volume of 634.5 million. The NYSE advances/declines ratio sits at 2,248 issues advancing vs. 476 declining with 120 unchanged.
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The Dow component leading the way higher looks to be Verizon Communications (NYSE: VZ), which is sporting a 91-cent gain (+2.1%) bringing the stock to $44.52. This single gain is lifting the Dow Jones Industrial Average by 6.89 points or roughly accounting for 8.1% of the Dow's overall gain. Volume for Verizon Communications currently sits at 1.5 million shares traded vs. an average daily trading volume of 13.7 million shares.

Verizon Communications has a market cap of $124.46 billion and is part of the technology sector and telecommunications industry. Shares are up 0.8% year to date as of Thursday's close. The stock's dividend yield sits at 4.7%.

Verizon Communications Inc. provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 140.7, above the S&P 500 P/E ratio of 17.7.

TheStreet Ratings rates Verizon Communications as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Holding back the Dow today is Merck (NYSE: MRK), which is lagging the broader Dow index with a $1.30 decline (-3%) bringing the stock to $41.95. Volume for Merck currently sits at 4.5 million shares traded vs. an average daily trading volume of 12.8 million shares.

Merck has a market cap of $132.24 billion and is part of the health care sector and drugs industry. Shares are up 6.3% year to date as of Thursday's close. The stock's dividend yield sits at 4%.

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company has a P/E ratio of 19.8, above the S&P 500 P/E ratio of 17.7.

TheStreet Ratings rates Merck as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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