Title: Two Unwavering Healthcare Dividend Stocks for Your Long-Term Portfolio
Investors seeking long-term holdings might look towards dividend-paying companies, particularly those in the healthcare sector. These firms often deliver a consistent income stream and tend to outperform non-dividend peers in the long run. Two such healthcare dividend stocks to consider are Merck (MRK) and Medtronic (MDT).
1. Merck
Recent market fluctuations have led to a 10% decline in Merck's shares this year. Many investors are already anticipating the loss of patent exclusivity for their biggest moneymaker, Keytruda, which is set to occur in 2028 within the U.S. Keytruda faces stiff competition from novelties like ivonescimab, a therapy being developed to tackle non-small cell lung cancer among other illnesses for which Keytruda has gained indications.
However, Merck has potential strategies to navigate this challenge. It's pursuing a subcutaneous version of its star drug that should gain the same indications as the original and perhaps extend Keytruda's patent life. The challenge posed by ivonescimab might be significant, but it won't hit U.S. shores for a couple of years at least.
Even beyond Keytruda, Merck is Advancing its presence in various fields. For instance, it's recently launched Winrevair for treating pulmonary arterial hypertension. Merck's vaccine business and its animal health division are also performing well. The pipeline features more than 60 programs in phase 2 trials and over 30 in phase 3 clinical trials.
As a long-standing leader in the pharmaceutical industry, Merck has a solid financial performance. Third-quarter revenue surged by 4% year-over-year to $16.7 billion, with adjusted earnings per share at $1.57. Although the figure represents a 26% drop compared to the previous year, it's primarily due to acquisition-related expenses. Personal finance worries should not be a major concern for investors.
Moreover, Merck's dividend has increased by an impressive 80% over the past decade, while offering a forward yield of 3.18%. Despite the poor stock market performance this year, Merck's resilience and strategic planning should enable it to keep rewarding shareholders with payout increases.
2. Medtronic
Medtronic, a medical device specialist, has faced difficulty in recent years. Between the pandemic and slow revenue growth, the company's stock has stagnated. However, regardless of these challenges, Medtronic presents a compelling opportunity for long-term dividend investors for three reasons:
- Solid market position and wide-ranging portfolio: Acknowledged as one of the largest medical device companies worldwide, Medtronic offers a multitude of products, secures regular approvals, and operates in various nations.
- Exciting growth opportunities: From promising segments like diabetes care (where revenues surged by 5.3% year-over-year in Q2'25) to potential advancements in robotic-assisted surgeries, Medtronic is positioning itself for long-term growth.
- Impressive dividend performance: With a 47-year streak of raising dividends, Medtronic has an incredible track record. The company, on the verge of attaining the title of "Dividend King," offers a dividend yield of 3.20%.
With the practical takeaways covered, let's delve deeper into Merck and Medtronic to identify their underlying challenges and opportunities, as well as their dividend performance.
- Investors interested in diversifying their finance portfolio might consider investing in Merck due to its robust financial performance and promising dividend growth.
- Medtronic, despite the recent challenges, remains an attractive option for finance-savvy individuals seeking long-term dividend stocks, given its impressive dividend history and growth potential.
