AIMZ Investment Advisors LLC has reduced its holdings in Merck & Co., Inc. (NYSE: MRK) by 2.1% during the second quarter of 2023, according to a recent filing with the Securities and Exchange Commission. The investment firm now owns 26,333 shares of Merck’s stock after selling 565 shares during the quarter, with a total value of approximately $2,085,000.
Several other institutional investors have also adjusted their positions in Merck. For instance, Hillsdale Investment Management Inc. significantly increased its stake by 273.3%, now holding 69,021 shares valued at $5,464,000 after acquiring an additional 50,530 shares. Similarly, YANKCOM Partnership raised its stake by 4.6%, acquiring 698 shares to bring its total to 15,713 shares valued at $1,244,000. Entropy Technologies LP and Magnetar Financial LLC also increased their holdings, with the latter boosting its stake by an impressive 334.4%.
As of the latest reports, institutional investors own approximately 76.07% of Merck’s stock, indicating strong confidence in the company’s performance.
Analysts Weigh In on Merck’s Stock Performance
Recent analyst reports reflect a mixed outlook for Merck’s shares. Wells Fargo & Company lowered its price target from $97.00 to $90.00 and assigned an “equal weight” rating. Berenberg Bank followed suit, downgrading Merck from a “buy” to a “hold” rating, with a revised target of $90.00.
In contrast, Morgan Stanley raised its price target from $98.00 to $100.00, maintaining an “equal weight” rating. Citigroup initiated coverage with a “neutral” rating and a target price of $95.00. Overall, analysts rate Merck with an average of “Hold” and a target price of $104.88, according to MarketBeat.
Merck’s stock has been trading at approximately $95.00, with a market capitalization of $235.80 billion. The company’s price-to-earnings (P/E) ratio stands at 14.64, and its 12-month range is between a low of $73.31 and a high of $105.07.
Merck’s Recent Earnings and Dividend Announcement
Merck released its earnings results on October 30, 2023, reporting earnings per share (EPS) of $2.58, surpassing analysts’ expectations of $2.36 by $0.22. Revenue for the quarter reached $17.28 billion, slightly above the consensus estimate of $17 billion, marking a 3.7% increase compared to the previous year.
Looking ahead, Merck has set its fiscal year 2025 guidance at $8.930 – $8.980 EPS, with analysts predicting an average EPS of $9.01 for the current year.
In addition to its financial performance, Merck announced a quarterly dividend of $0.85 per share, which will be paid on January 8, 2024. Shareholders of record on December 15, 2023, will receive this dividend, reflecting an annualized rate of $3.40 and a dividend yield of 3.6%. This marks an increase from the previous quarterly dividend of $0.81.
The company’s payout ratio currently stands at 42.80%, indicating a balanced approach to returning value to shareholders while retaining sufficient capital for growth.
Insider Transactions Signal Market Activity
In related news, Merck’s Executive Vice President, David Michael Williams, sold 8,614 shares on November 3, 2023, at an average price of $83.59, totaling approximately $720,044. Following the sale, Williams retains 24,578 shares valued at about $2,054,475. This transaction represents a notable 25.95% decrease in his ownership of Merck stock.
Company insiders currently own 0.13% of Merck’s stock, reflecting a cautious approach to insider selling amid the company’s financial developments.
Merck & Co., Inc. continues to be a significant player in the health care sector, focusing on prescription medicines, vaccines, and biologic therapies. Its diversified operations across pharmaceutical segments enable it to maintain a strong market presence while responding to evolving health care needs.
