Merck: Long-Term Value Amid Patent Headwinds

about 2 months ago

Hari Rama

"My pick today is Merck... it is one of the cheapest now among all the big pharmas... holding this stock for the next five years will help us earn the dividends of 4% while potentially delivering a 15% internal rate of return."

Hari pitches Merck (assumed ticker MRK) as an undervalued pharmaceutical with strong oncology leadership via its blockbuster drug Keytruda. Despite the upcoming patent expiry in 2028 and regulatory headwinds regarding drug pricing, Merck is trading at a lower PE relative to peers and offers a 4% dividend yield along with potential long-term IRR of around 15%.

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