Merck (MRK) Increases Quarterly Dividend by 11%

Merck & Company (NYSE:MRK) based out of Whitehouse, NJ reported on Thursday that the company has increased its quarterly dividend for the first time in seven years. The company boosted its dividend by 11% to 42 cents a share. The last increase in Merck’s dividend occurred in 2004, before the company’s costly decision to withdraw its painkiller Vioxx from the market because of safety concerns.

In a meeting with investors and analysts, Merck CEO Kenneth Frazier assured investors that Merck is committed to returning cash to its shareholders. “While we’re confident in our long-term future, we also recognize we can’t ask you, our investors, to wait for us to achieve all of our long-term aspirations without getting a return” in the near term, Frazier said. Shareholders have become impatient with Merck’s slow pace of drug-research efforts.

CEO Kenneth Frazier said the company hopes to keep 2012 revenue about the same as this year’s. In this year’s first nine months, it has increased sales by 5%, or nearly $2 billion, to about $35.8 billion.

“Innovation is the centerpiece of our growth strategy at Merck,” said Kenneth C. Frazier, president and chief executive officer. “We continue to make significant progress on our strategy to drive growth from our existing portfolio and to bring forward breakthrough medicines and vaccines that address unmet medical needs and return significant value to our shareholders.”

Merck has several new drugs in late stage testing that could prove to be very successful for patients with diabetes, high cholesterol, and HIV patients as well.

Merck is the world’s third largest drug-maker by revenue. Merck said it has eight new drugs that it will seek FDA approval for in 2012-2013. In recent years, Merck has been hit hard by generic drugs coming into the marketplace. Next year, Merck’s Singulair, a $5 billion a year allergy and asthma drug will get hit by generic competition.

Merck also has a breakthrough hepatitis C drug Victrelis ready to hit the market.

In mid-day trading, Merck shares rose $1.08, or 3.2 percent, to $34.88.

written by Kyle Pinder

Kyle Pinder has has over five years trading and research experience in the large cap space. While still in grad school, Kyle trades daily and keep Active Investor up to date with the latest breaking news coming out of Wall Street and Washington.

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