Merck & Co vs Pfizer Which Outperforms?

Merck & Co and Pfizer are two of the largest pharmaceutical companies in the world, both competing for dominance in the healthcare industry. Their stocks have been closely followed by investors due to their extensive product portfolios, strong financial performances, and innovative research and development efforts. While both companies have faced challenges and opportunities in the market, their stocks have shown resilience and growth potential, attracting the attention of investors seeking to capitalize on the growth of the pharmaceutical sector.

Merck & Co or Pfizer?

When comparing Merck & Co and Pfizer, 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 Merck & Co and Pfizer.

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. Merck & Co has a dividend yield of 3.82%, while Pfizer has a dividend yield of 6.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Merck & Co reports a 5-year dividend growth of 8.26% year and a payout ratio of 63.72%. On the other hand, Pfizer reports a 5-year dividend growth of 4.08% year and a payout ratio of 221.76%.

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 Merck & Co P/E ratio at 21.07 and Pfizer's P/E ratio at 34.91. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Merck & Co P/B ratio is 5.75 while Pfizer's P/B ratio is 1.61.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Merck & Co has seen a 5-year revenue growth of 0.45%, while Pfizer's is 0.13%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Merck & Co's ROE at 29.27% and Pfizer's ROE at 4.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $100.46 for Merck & Co and $26.22 for Pfizer. Over the past year, Merck & Co's prices ranged from $98.60 to $134.63, with a yearly change of 36.54%. Pfizer's prices fluctuated between $25.20 and $31.54, with a yearly change of 25.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.