High dividend stock MRK goes on sale!

Research on Safe Withdrawal Rates

Moderator: hocus2004

Post Reply
User avatar
ben
*** Veteran
Posts: 231
Joined: Mon Feb 17, 2003 4:00 am
Location: The world is not enough

High dividend stock MRK goes on sale!

Post by ben » Fri Jan 28, 2005 11:30 am

Hammered due to some patent issues - down about 10% today - dividends around 5%. might be time to pick up some more eh JWR?
Normal; to put on clothes bought for work, go to work in car bought to get to work needed to pay for the clothes, the car and the home left empty all day in order to afford to live in it...

peteyperson
**** Heavy Hitter
Posts: 525
Joined: Tue Nov 26, 2002 6:46 am

Post by peteyperson » Mon Jan 31, 2005 12:02 pm

Merck just got some more bad news. Stock hammered some more.

Petey

ben wrote:Hammered due to some patent issues - down about 10% today - dividends around 5%. might be time to pick up some more eh JWR?

JWR1945
***** Legend
Posts: 1697
Joined: Tue Nov 26, 2002 3:59 am
Location: Crestview, Florida

Post by JWR1945 » Tue Feb 01, 2005 3:20 pm

I bought more Merck today.

Have fun.

John R.

peteyperson
**** Heavy Hitter
Posts: 525
Joined: Tue Nov 26, 2002 6:46 am

Post by peteyperson » Tue Feb 01, 2005 4:00 pm

What is your analysis on Merck? I'm curious as to how you see things playing out. The last time I looked at it, it seemed reasonable to assume no growth in earnings for some years to come and now there are additional declines in income expected.

I like GlaxoSmithKline which has a 3.45% dividend yield, a history of dividend increases way above inflation and a PE of under 16. Shortfalls in future pipeline appear overplayed as they have revamped their approach and it seems to have helped. Reporting by the Chairman and CEO is also extremely frank about the problems & challenges faced by big pharma which was also encouraging. Certainly wasn't the usual annual letter to shareholders puff-piece with only positive news and lets sweep everything else under the carpet.. hope they don't notice approach!

Petey

JWR1945 wrote:I bought more Merck today.

Have fun.

John R.

JWR1945
***** Legend
Posts: 1697
Joined: Tue Nov 26, 2002 3:59 am
Location: Crestview, Florida

Post by JWR1945 » Tue Feb 01, 2005 4:18 pm

I like GlaxoSmithKline which has a 3.45% dividend yield, a history of dividend increases way above inflation and a PE of under 16. Shortfalls in future pipeline appear overplayed...

All of this describes Merck as well.

My impression is that Merck withdrew Vioxx strictly because of lawyers.

It is arguable medically as to whether Merck should have withdrawn Vioxx. IIRC, they withdrew Vioxx as soon as it was clearly established that long-term use results in 7.5 deaths per thousand via heart problems. Alternatives to Vioxx cause 7.5 deaths per thousand via stomach problems.

Medically, doctors need to know about side effects. With Vioxx, they would have to monitor their patients for any indication of heart problems. This is far from unusual.

Merck is known for their high ethical standards. If Merck goes down, we will have no medical industry in the United States.

Have fun.

John R.

peteyperson
**** Heavy Hitter
Posts: 525
Joined: Tue Nov 26, 2002 6:46 am

Post by peteyperson » Tue Feb 01, 2005 8:25 pm

Well this may not be the case, but I would suggest that world governments, particularly the U.S., would not allow that to happen. 70% of world pharma is based in the U.S. With the end of that industry comes massive falls in medical science, cure, prevention and treatment. Governments have shown themselves to be lousy R&D operations and for-profit mechanisms are required for productive results from R&D investments.

So I think something bad could happen to Merck, but I don't think the governments would allow all drug companies to fold. They would move in and change the legislation before that happened. They would simply have to. There would eventually be too much public pressure as drugs started to dry-up and people couldn't get medicated. Of course this could just mean the the generics take over and it becomes a free-for-all. But I think that is extreme and fairly unlikely outcome. Things rarely would out in the worst case scenario and companies typically come back when having been discounted as the waking dead (no pun intended). Honest! :lol:

Petey

JWR1945 wrote:
I like GlaxoSmithKline which has a 3.45% dividend yield, a history of dividend increases way above inflation and a PE of under 16. Shortfalls in future pipeline appear overplayed...

All of this describes Merck as well.

My impression is that Merck withdrew Vioxx strictly because of lawyers.

It is arguable medically as to whether Merck should have withdrawn Vioxx. IIRC, they withdrew Vioxx as soon as it was clearly established that long-term use results in 7.5 deaths per thousand via heart problems. Alternatives to Vioxx cause 7.5 deaths per thousand via stomach problems.

Medically, doctors need to know about side effects. With Vioxx, they would have to monitor their patients for any indication of heart problems. This is far from unusual.

Merck is known for their high ethical standards. If Merck goes down, we will have no medical industry in the United States.

Have fun.

John R.

JWR1945
***** Legend
Posts: 1697
Joined: Tue Nov 26, 2002 3:59 am
Location: Crestview, Florida

Post by JWR1945 » Fri Feb 18, 2005 2:14 pm

This is our most recent thread about Merck.
ben wrote:Hammered due to some patent issues - down about 10% today - dividends around 5%. might be time to pick up some more eh JWR?
This is a bad day for the lawyers.

[Even worse for the lawyers was the recent passage of legislation that will move class action suits into the Federal Courts. Lawyers will no longer be able to choose the most lucrative counties for trying class action suits.]

An official advisory panel to the FDA has recommended putting Merck's Vioxx back on the market.

Fortunately, I was able to pick up all of the additional shares that I had planned to purchase prior to today's announcement.

Having fun,

from John R.

unclemick
*** Veteran
Posts: 231
Joined: Sat Jun 12, 2004 4:00 am
Location: LA till Katrina, now MO

Post by unclemick » Sat Feb 19, 2005 5:07 am

Boy I'm tempted but would have to sell something incurring a tax hit to buy Merck.

So for now will soldier on with Glaxo and Lilly( 1994) since their dividend growth has been acceptible.

My AT&T mini position is going - I already own SBC.

May yet do it - or not

User avatar
ben
*** Veteran
Posts: 231
Joined: Mon Feb 17, 2003 4:00 am
Location: The world is not enough

Post by ben » Sat Feb 19, 2005 5:13 am

That was a solid jump today! Since not planning to pick up more I am happy with that. Cheers, Ben
Normal; to put on clothes bought for work, go to work in car bought to get to work needed to pay for the clothes, the car and the home left empty all day in order to afford to live in it...

Post Reply