MRK Dividends for One Year

Merck is a large cap pharmaceutical company

Today I bought another 25 shares of MRK. This brings my total MRK holdings to 450 shares. I also ordered a new laptop computer. I also added MRK shares last week.

One of the ways I encourage investors to look at their dividend income is what it could buy or what expenses it can cover. For example, if your average monthly utility costs are $150, then the total annual cost for utilities would be about $1,800. If your annual dividend income from an investment is $1,800, then you can almost ignore the ups-and-downs of the stock price because your utility bills can be paid with income from your investment. This is especially true if the dividend payout ratio is sensible and if the company has a reasonable history of dividend growth.

A growth investor might want to avoid MRK. But then, buying at the right time can make the difference.

The new laptop is an upgrade for me, but it is also because my current laptop is gradually getting cantankerous. The total price for the system I ordered was $1,190.11. This total includes sales tax, Windows 10, and a good four-year warranty. It is significantly better and more powerful than the one I currently use. Sadly, my current 4-year-old laptop is dying slowly. Several of the keys on the keyboard are malfunctioning including the question mark! My MRK dividends will pay for this new laptop.

Focused Healthcare ETFs Like FTXH and IEIH

FTXH has a substantial position in MRK stock.

I bought MRK instead of a pharmaceutical ETF. But you don’t have to follow my example. Another way to get a chunk of MRK and other good pharmaceutical companies is to buy an ETF with a focus on healthcare companies. Although I dislike the expense ratios on some of these, they can be good for some investors. For example, FTXH is the “First Trust Exchange-Traded Fund VI – First Trust Nasdaq Pharmaceuticals ETF.” This ETF has an expense ratio of 0.60%. The yield for FTXH is poor. A better choice might be IEIH “iShares U.S. ETF Trust – iShares Evolved U.S. Innovative Healthcare ETF” because it has a better expense ratio and a much higher dividend yield. IEIH also has much better healthcare diversification and holds shares of all of my favorite healthcare companies.

You can use ETF Channel to find ETFs that hold a company’s stock. I own shares of VYM and DGRO.

My MRK Dividends

MRK currently has a yield of 3.43% and a very reasonable payout ratio of 40.33%. The next dividend will be $0.65, so I will receive $292.50 on April 7th for my current 450 shares. Annually my shares will pay me $1,170, essentially covering the cost of the new laptop. This, of course, assumes that the dividend is not increased or decreased during the next three quarters.

MRK Dividend Dates

Dates matter when buying and selling investments that pay a dividend. The most important date to me is not the day I will be paid. The date that matters is the Ex-Dividend Date. This is the date I must own the shares to receive the dividend. Therefore, for my MRK holdings, any shares I purchase before March 12, 2021 add to my quarterly dividend income. It is highly likely that I will buy another 50 shares of MRK before that date, bringing my total share count to 500. That, in turn, would bring my quarterly MRK income to $325, or $1,300 for the year. My laptop cost, if I do that, will be completely covered.

History of Paying Dividends

There are other factors I consider when I buy a dividend-growth investment. One is the number of years the company has increased their dividend. For MRK it has been ten years. MRK’s dividend growth has been somewhat choppy, but the overall trend is good. I also want to see a 5-year growth rate that is better than inflation. For MRK the growth rate is 6.50%. The one-year growth rate is better than that.

Full Disclosure

I own 450 shares of MRK in my traditional IRA as a long-term investment. My grandchildren own shares of FHLC in their UTMA accounts (FHLC – Fidelity Covington Trust – Fidelity MSCI Health Care Index ETF). They, therefore, also have MRK as an investment in their UTMA accounts by virtue of owning FHLC.

LINK: Merck Investor Relations

Merck Company Profile

Merck & Co., Inc. provides healthcare solutions worldwide. The company offers therapeutic for cardiovascular, type 2 diabetes, chronic hepatitis C virus, HIV-1 infection, intra-abdominal, fungal infection, insomnia, and inflammatory diseases; neuromuscular blocking agents; cholesterol modifying medicines; and anti-bacterial and vaginal contraceptive products. It provides products to prevent chemotherapy-induced and post-operative nausea and vomiting; treat non-small-cell lung, ovarian and breast, esophageal, thyroid, cervical, and brain cancers; and prevent diseases caused by human papillomavirus, as well as vaccines for measles, mumps, rubella, varicella, shingles, rotavirus gastroenteritis, and pneumococcal diseases. In addition, the company offers drugs for hepatocellular and merkel cell carcinoma; antibiotic and anti-inflammatory drugs for infectious and respiratory diseases, fertility disorders, and pneumonia in cattle, bovine, and swine; vaccines for poultry; parasiticides for sea lice in salmon; and antibiotics and vaccines for fish. Further, it provides companion animal products; diabetes mellitus treatment and anthelmintic products for dogs and cats; products to treat fleas, ticks, mosquitoes, and sandflies; horse fertility management products for swine; and dog, cat, and horse vaccines. Additionally, the company offers services and solutions that focus on engagement, clinical, and health analytics. Merck & Co., Inc. has collaborations with AstraZeneca PLC; Bayer AG; Eisai Co., Ltd.; Almac Discovery Ltd.; Skyhawk Therapeutics, Inc.; Ridgeback Biotherapeutics; Shanghai Junshi Biosciences Co., Ltd.; FUJIFILM Corporation; Intec Pharma Ltd.; Transcenta Holding Ltd.; and Janux Therapeutics, Inc. It serves drug wholesalers and retailers, hospitals, and government agencies; managed health care providers; and physicians and physician distributors, veterinarians, and animal producers. The company was founded in 1891 and is headquartered in Kenilworth, New Jersey.