Pfizer vs Merck & Co Which Is Superior?

Pfizer and Merck & Co are two pharmaceutical giants that have dominated the industry for decades. Both companies have a long history of developing innovative drugs and treatments that have had a significant impact on global health. Investors often compare the two stocks to determine which is the better investment option. While Pfizer has a larger market capitalization and a broader product portfolio, Merck & Co is known for its strong pipeline of new drugs and consistent revenue growth. Understanding the strengths and weaknesses of each company is essential for investors looking to make informed decisions about their portfolios.

Pfizer or Merck & Co?

When comparing Pfizer 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 Pfizer 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. Pfizer has a dividend yield of 6.57%, 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. Pfizer reports a 5-year dividend growth of 3.82% year and a payout ratio of 221.76%. 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 Pfizer P/E ratio at 34.03 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. Pfizer P/B ratio is 1.57 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, Pfizer has seen a 5-year revenue growth of 0.13%, while Merck & Co's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Pfizer's ROE at 4.72% 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 $25.26 for Pfizer and $100.53 for Merck & Co. Over the past year, Pfizer's prices ranged from $24.48 to $31.54, with a yearly change of 28.84%. 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.