Time To Buy This Dirt-Cheap Stock

I want to tell you about an opportunity I recently came across with shares of Merck & Co., Inc., which appear to be trading at a significant discount today... Merck & Co., Inc. - stock ticker MRK - is a leading global pharmaceutical company that produces a range of medicines, vaccines, and animal healthcare products. It's possibly one of the best stocks to buy now.

The US is the company’s largest market, accounting for over 40% of worldwide sales. Some of the company’s key drugs include Keytruda, Januvia, Gardasil, and ProQuad. Keytruda, their wonder cancer drug, is the company's most important product. It's by far the top-selling drug in their portfolio.

This single drug made up almost 30% of the company's worldwide sales for FY 2020. That compares to nearly 25% of company revenues for FY 2019. So this drug is becoming a larger piece of a growing pie. The company's biggest product is also one of its fastest-growing products. That's a great position to be in. Also, Keytruda isn't only Merck's best-selling drug. At almost $15 billion in sales for FY 2020, it's one of the top drugs on the planet - second only to Humira. And it's forecasted to be the best-selling drug in the world by the middle of this decade.

They've already increased their dividend for 10 consecutive years.

The five-year dividend growth rate is 6.3%, which is something they've been pretty consistent with. Indeed, the most recent dividend increase, announced in November, came in at 6.6%. This growth comes attached to the stock's current yield of 3.4%. That yield, by the way, is 50 basis points higher than the stock's five-year average yield. And the dividend remains protected by a payout ratio of 43.7%, using adjusted FY 2020 EPS. This is a very appealing combination of yield and growth. I consider the "sweet spot" for a dividend growth stock to be a yield of between 2.5% and 3.5%, backed by a mid-single-digit (or better) dividend growth rate.

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