1. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that provides innovative health solutions to its consumers. The company’s flagship cancer drug, Keytruda has been approved for numerous indications. Recently, the company reported that a Phase 3 trial evaluating Keytruda for a specific type of ovarian cancer achieved its primary goal of improving progression-free survival but fell short of meeting the secondary goal of extending overall survival. Currently, Keytruda is approved in the US for 40 different oncology indications. Merck is actively working to secure similar approvals for the drug in key international markets, including the European Union and Japan, where these indications are not yet authorized.
In the third quarter of 2024, Keytruda sales grew by 17% from the same period last year, reaching $7.4 billion. This was also highlighted by GreensKeeper Asset Management in its Q3 2024 investor letter. Here is what the firm said:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
Overall, Merck & Co., Inc. (NYSE:MRK) reported revenue of $16.66 billion, which showed a 4.3% growth from the same period last year. The company’s pipeline continues to progress and grow, reflecting its ability to establish a sustainable innovation framework and positioning it with a more diversified portfolio to support future growth.
On November 19, Merck & Co., Inc. (NYSE:MRK) declared a 5.2% hike in its quarterly dividend to $0.81 per share. Through this increase, the company stretched its dividend growth to 14 years, which makes it one of the best dividend stocks on our list. The stock supports a dividend yield of 3.21%, as of December 10.
Insider Monkey’s database of Q3 2024 showed that 86 hedge funds owned stakes in Merck & Co., Inc. (NYSE:MRK), down from 96 a quarter earlier. These stakes have a collective value of more than $7.1 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q3.
Overall, Merck & Co., Inc. (NYSE:MRK) ranks first on our list of the best dividend kings. While we acknowledge the potential for MRK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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