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Is Merck Stock a Solid Long-Term Investment?


Merck Stock has been the topic of discussion for over a year among investors and speculators. Investors building retirement portfolios are eyeing stocks with the highest potential to help them reach their financial goals in their golden years. Are the rumors true and is Merck Stock a solid long-term investment? We consulted various analyst opinion sites to get a better picture of the performance history of Merck, current observations, and the rationale behind positive projections for future performance. All stock market investments are calculated risks, but some are better bets than others. We take a look at current facts and opinions to give you solid information to form your opinions on the potential for Merck in the long haul.

Recent history of Merck Stock

Forbes examined the performance of Merck Stock back in the early to the latter part of 2021. Analysts pointed out that in October of 2021, Merck saw a surge in the price of 8% after it announced that a product reduces hospitalizations and death risks for patients with Covid-19. Investors took it as a positive sign that the company would make a profit on the new drug. As the drug headed toward the approval process and the likelihood of initial injections and booster shot use, stocks climbed in light of the high revenue potential for the candidate vaccine. The price surge was followed by an additional 11% rise in an upward trend over five trading days suggesting the stock would continue to rise. The surge came after a disappointing 12-month trailing period with Merck suffering along with other pharmaceutical companies by the hit they took at the beginning of the outbreak of the pandemic. Shares lagged over the past year, but recent developments in 2021 marked a new period for the company. Merck's approval for the cancer treatment drug Keytruda helped bolster the confidence of investors along with a solid lineup of other successful treatment products and others in the approval pipeline. Things started to turn around until the 2021 surge that put Merck back in the spotlight for investors and financial advisors.

Is Merck a solid long-term investment?

Seeking Alpha analysts explain that Merck is among the most desirable blue-chip stocks for 2022. As of May 6, 2022, the stock has risen approximately 20% since the end of 2021 and has a high confidence rating from investors. Value and quality are natural technical corrections made due to rising interest rates landing Merck as one of the safest investments in its classification. The expert analysis covers the sentiments of investors at the present and the stability of the stock is solid for the time being. They also conclude that it's a strong buy for 2022, but is the growth sustainable? What about the prospects for the long-term. The experts at Seeking Alpha suggest that the long-term prospects of MRK stock deliver high and continue to climb. Some even venture that MRK is as near to perfection in the blue-chip arena as investors are likely to find at the present. Furthermore, they point out that Merck has a low-risk rating of 91% with 13/13 Ultra Swan quality as a pharmaceutical giant, ranking 27th in high quality and 95% on the Master list. It's an exceptionally safe investment with a dividend safety score of 94% and a yield of 3.2%. The dividend cut risk is 0.5% with a 1.3% risk of recession dividend cuts. It's worth noting there've been no cuts since 1985. The company's movement toward oncology drives growth at a stronger projection with earnings at a historical level. The company has a stable credit rating at A+ with a total return forecast at a consensus of 7% over the next 12 months.

The Fool's take on MRK stock as a solid long-term investment

The Motley Fool adds that Merck hasn't yet reached its peak. Keytruda is one of many drugs with the potential to become a top-selling treatment worldwide. The company has an animal health division that is also performing well with an increase of 16%. Molnupiravir, is its most recent therapy for Covid-19, and it shows positive results in its stage 2 clinical trials, and it shows higher promise than treatments in the pipeline of its competitors. Merck is surging ahead with promising products at all stages of development. Sales are rising and Merck is one of the animal healthcare industry's most prominent players. Expansion forecasts in this segment are set for a growth rate of 9 percent between now and 2028. Prospects for Merck's future growth are high showing ample justification for its potential for sustaining the trend of upward growth. Merck plans to acquire all of Acceleron Pharma's outstanding shares by the end of the fourth quarter. It will add a new candidate drug in the pipeline called Sotatercept, a potential add-on treatment for PAH (hypertension).

Merck is a strong buy

Analysts with The Fool place Merck's stock as a buy for 2022. The thinkers at Seeking Alpha also see the strong potential for the MRK to continue on its upward path of growth. When considering additions to your long-term investment portfolio the most important factors to consider are stability, performance, and the rationale behind projections for growth. It's hard to find a reason for MRK to take a downward spiral. They're doing all the right things from an established position of power through reputation and a proven track record of positive results. MRK is a stock that is on track for continued growth in the foreseeable future. The consensus is that it's a low-risk stock that is not likely to suffer from inflation. The future forecast is sunny with a steady flow of candidate drugs with a high likelihood of boosting its already healthy revenue growth. Merck stock has all of the reasons we look for to determine the long-term potential of an investment.

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Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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