Is Merck & Co., Inc. (MRK) One of the Best Companies in America?

Page 1 of 2

The Motley Fool recently whittled down 1,700 public companies to name its list of The 25 Best Companies in America. Merck & Co., Inc. (NYSE:MRK), the second-largest pharmaceutical company in the U.S. behind Pfizer Inc. (NYSE:PFE), didn’t make the final cut — neither did Pfizer.

But unlike Pfizer, Merck & Co., Inc. (NYSE:MRK) was at least able to claim a consolation prize, making it to the final group of about 40 companies before getting cut. Pfizer didn’t have the metrics to get that far.

Merck & Co., Inc.Merck & Co., Inc. (NYSE:MRK) sells a variety of drugs. Everything from Singulair for asthmatics, Januvia for diabetics, HPV vaccine Gardasil, and an HIV drug called Isentress. It even has drugs for animals and consumer health products such as Coppertone sunscreen and Dr. Scholl’s foot-care products.

The case for Merck
In 2008, Merck & Co., Inc. (NYSE:MRK) announced disappointing results from the Enhance trial testing its cholesterol-lowering drug Vytorin, where the drug didn’t reduce plaque in patients’ arteries more than a cheaper generic. Shares fell. A lot. Rightfully so because Vytorin was a major portion of the company’s growing revenue stream.

But since the Enhance tragedy, Merck & Co., Inc. (NYSE:MRK) has turned things around. Shares have nearly doubled from the lows in 2009. And the total return has been substantially higher than that thanks to Merck’s shareholder-friendly stance on its cash.

Even with the share decline, Merck & Co., Inc. (NYSE:MRK) held its dividend steady. Investors that bought near the 2009 lows have seen about 30% of their purchase price returned to them in the form of dividends. The dividend raises went on a hiatus while the company turned things around after the Vioxx scandal, but now that things are back on track Merck has raised the dividend over the last two years. The dividend yield sits at more than 4%, trumping Johnson & Johnson (NYSE:JNJ)‘s 3.4%, Pfizer’s 3.6%, and Sanofi SA (ADR) (NYSE:SNY)‘s 3.5% dividend yields.

In 2009, Merck acquired its partner, Schering-Plough. While large acquisitions in this space haven’t exactly produced solid returns on the investment, Merck’s looks fairly solid thus far. Schering-Plough helped Merck restock its pipeline, and since they were already partners on Vytorin and Zetia, Merck was able to value Schering-Plough appropriately and not overpay. At the time, I commented that the acquisition looked much better than the Pfizer-Wyeth combination and so far Merck’s combination has exceeded my expectations.

Beyond shareholders, Merck appears to be balancing the rest of the stakeholders by being a good corporate citizen. For the last four years, Merck has been on the Dow Jones Sustainability North America Index, the top 20% of the largest 500 North American companies based on corporate economic, environmental, and social performance.

Merck’s patient assistance program dates back more than 50 years. In the last 10 years alone, Merck has provided 32 million free prescriptions valued at more than $2.5 billion.

The average employee review of the company on Glassdoor was 3.2 out of 5. That’s not particularly impressive, but might be somewhat explained by the fact that Merck had to cut so much of its workforce after the merger with Schering-Plough. In 2011, employee turnover was 14% including restructuring.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!