Time To Buy This Dirt-Cheap Stock

This stock is right there.

Simply put, this company is, in many ways, better today than it's ever been. With Keytruda going stratospheric, the company will have the capability to produce dividend raises that are higher than they were in the past. I'm assuming a very small acceleration in dividend growth, which is not unreasonable when looking at the totality of the business. The DDM analysis gives me a fair value of $111.80.

Morningstar rates MRK as a 4-star stock, with a fair value estimate of $100.00. CFRA rates MRK as a 4-star "BUY", with a 12-month target price of $90.00. We have a small range here. Averaging the three numbers out gives us a final valuation of $100.60, which would indicate the stock is possibly 30% undervalued.

Here's the bottom line, guys: Merck & Co., Inc. is a high-quality company that has one of the best-selling and fastest-growing products in its industry. The fundamentals are great, and they're only getting better. With a market-beating yield, strong dividend growth, a moderate payout ratio, 10 consecutive years of dividend raises, and the potential that shares are 30% undervalued, this might be one of the very best deals in the market for dividend growth investors.

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