A Dangerous Dividend Stock to Sell

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Merck & Co. (NYSE: MRK ) - Following a major advance in the stock market, a period of neutral price action is normal. During this lull, investors should review their holdings and cull out non-performers that are inhibiting overall portfolio profits.

Despite being a global health-care company, Merck is a stock to sell. Not only is the stock still in a bear trend, but the last five years have averaged a negative earnings growth of 33.32%, and current profit margins are at a mere 2.14% in an industry that averages in the teens.

The combined research at TD Ameritrade recently cut their opinion of MRK to "reduce," and that is a good suggestion. Even though the dividend yield is at 4.68%, there is no assurance that it will stay at that level, and an increase in bond interest rates would bring in sellers who have held this stock as a "bond substitute."

Trade of the Day - MRK Strock Chart
Trade of the Day Chart Key

If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: MRK

Sam Collins

Sam Collins

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