Broker Darlings of the Dow: Merck Ranks As a Top 15 Analyst Pick

A study of analyst recommendations at the major brokerages shows that Merck & Co., Inc (MRK) is the #12 broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel. Merck & Co., Inc also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #218 spot out of 500.

In forming this rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the underlying components were ranked according to those averages. Investors often interpret analyst opinions from different angles — a popular analyst pick could mean that many sharp minds individually came to the same bullish conclusion, and therefore the stock should do well, but it could also mean that if the company stumbles, that would come as a negative surprise.

START SLIDESHOW:
The Top 15 Broker Darlings of the Dow: Current Top Analyst Picks »

From the other direction, when companies have a low rank among analysts, it isn't necessarily the case that investors should conclude that the stock will perform poorly. It can, of course, but a bullish investor could also take the contrarian angle and read into the data that there is lots of room for upside because the stock is so out of favor.

For these reasons, we at ETF Channel find value to putting together these rankings, because both the top and the bottom ends of the lists can often make for some interesting stock picking ideas for further research.

START SLIDESHOW:
15 Forgotten Giants of the S&P 500: Analysts' Current Least Favorites »

Below is a chart of rank over time: Loading+chart++2014+TickerTech.com

According to the ETF Finder at ETF Channel, MRK makes up 2822.04% of the WisdomTree Equity Income Fund ETF (DHS) which is trading lower by about 0.1% on the day Thursday.

MRK operates in the Drugs & Pharmaceuticals sector, among companies like Johnson & Johnson (JNJ) which is down about 0.3% today, and Novartis (NVS) trading lower by about 0.5%. Below is a three month price history chart comparing the stock performance of MRK, versus JNJ and NVS.

MRK,JNJ,NVS Relative Performance Chart

MRK is currently trading off about 0.6% midday Thursday.

More from Stocks

Dow Rises for First Time in 9 Days, Oil Soars as OPEC Agrees to Boost Output

Dow Rises for First Time in 9 Days, Oil Soars as OPEC Agrees to Boost Output

GM Defies Trump's Trade Outlook by Building New Chevy Blazer in Mexico

GM Defies Trump's Trade Outlook by Building New Chevy Blazer in Mexico

Video: Here Is Why Carvana Isn't Worried About Amazon

Video: Here Is Why Carvana Isn't Worried About Amazon

Jim Cramer: Okta Is a Very Expensive Stock

Jim Cramer: Okta Is a Very Expensive Stock

Here's Why Tesla's Solar Shakeup Makes Sense

Here's Why Tesla's Solar Shakeup Makes Sense