Amgen vs Merck & Co Which Is a Better Investment?

Amgen and Merck & Co are two leading pharmaceutical companies in the healthcare industry, each with a long history of innovation and success. Both companies have a strong track record of developing cutting-edge drugs and treatments for various diseases and medical conditions. Investors looking to add growth stocks to their portfolio may consider Amgen for its focus on biotechnology and Merck & Co for its diverse portfolio of pharmaceutical products. Analyzing the financial performance and market trends of these companies can provide valuable insights for making informed investment decisions.

Amgen or Merck & Co?

When comparing Amgen and Merck & Co, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Amgen and Merck & Co.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Amgen has a dividend yield of 3.33%, while Merck & Co has a dividend yield of 2.26%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amgen reports a 5-year dividend growth of 10.04% year and a payout ratio of 112.70%. On the other hand, Merck & Co reports a 5-year dividend growth of 8.26% year and a payout ratio of 63.72%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Amgen P/E ratio at 34.36 and Merck & Co's P/E ratio at 21.26. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amgen P/B ratio is 19.31 while Merck & Co's P/B ratio is 5.80.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amgen has seen a 5-year revenue growth of 0.47%, while Merck & Co's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amgen's ROE at 68.49% and Merck & Co's ROE at 29.27%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $270.02 for Amgen and $100.53 for Merck & Co. Over the past year, Amgen's prices ranged from $257.80 to $346.85, with a yearly change of 34.54%. Merck & Co's prices fluctuated between $94.48 and $134.63, with a yearly change of 42.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.