Merck & Co. (NYSE:MRK) is one of the largest pharmaceutical companies in the world. Shares have climbed 11.5% in 2019 as of close on November 8. The stock has achieved average annual returns of 12% over the past 10 years.
Investors can also enjoy its 2.5% dividend yield. The pharma giant released its third quarter 2019 results on October 29. It reported non-GAAP earnings per share of $1.57, which was up 27% from the prior year. This blew away analyst estimates. Revenue surged 15% year-over-year to $12.4 billion.
Merck was powered by 62% sales growth in the cancer drug Keytruda, which reached $3.1 billion. The drug has received approval to treat several different kinds of cancers, which has driven sales. Gardasil, its vaccine which targets the human papillomarivus that can cause cancer, posted sales growth of 26% compared to the previous year.
These results allowed Merck to raise its guidance for non-GAAP earnings per share, it also narrowed its revenue guidance in the higher range.
Merck now forecasts revenue between $46.5 billion and $47 billion compared to between $45.2 billion and $46.2 billion to start the year.
The company projects adjusted earnings per share between $5.12 and $5.17, up from its previous range between $4.84 to $4.94.
Health care stocks have been massive winners over the past decade, and I expect this to hold into the 2020s. Merck has made significant investments into research and development that continue to pay off.
The stock is an established dividend payer and Merck is carrying a strong track record and promising growth potential into the next decade.
