Headquartered in New Jersey and founded in 1891, Merck & Co. (MRK) is a global health care company that focuses on the development of pharmaceutical products, notes Ned Piplovic, editor of DividendInvestor.

Among its full spectrum of drugs and medications, the company provides therapeutic and preventive agents to treat cardiovascular diseases, type 2 diabetes, acute and chronic pulmonary conditions, chronic hepatitis C virus, HIV-1 infection, fungal, intra-abdominal infections, arthritis and pain, inflammatory, osteoporosis and fertility diseases.

Additionally, the company offers products to prevent chemotherapy-induced and post-operative side-effects, treat brain tumors and certain types of lung cancer, as well as offers vaccines for measles, mumps, rubella, varicella, shingles, rotavirus gastroenteritis and pneumococcal diseases.

The company’s current $0.48 quarterly dividend is one cent — or 2.1% — higher than the $0.47 paid out in the same period last year. The company has followed this pattern of increasing its quarterly dividends by one cent in the first quarter of the year for the past six consecutive years.

Merck’s current quarterly payout is equivalent to a $1.92 annualized payout per share and currently yields 2.8%. The rapid share-price growth in the second half of 2018 suppressed the current dividend yield to 7.8% below the 3.0% five-year average yield. At the beginning of April 2018, the yield was nearly 3.6%.

However, even the lower current yield is still 360% higher than the 0.6% average yield of the entire health care sector. Furthermore, Merck’s current 2.8% yield is 52% above the 1.82% simple average yield of its competitors in the drug segment and even 6.4% higher than the 2.6% average yield of the segments’ only dividend-paying companies.

While paying rising dividends over the past seven consecutive years, the company enhanced it total annual dividend amount 26%, which is equivalent to a 3.4% average annual growth rate.

The resurgence of capital growth and rising dividends rewarded Merck’s shareholders with significant total returns over the past few years. While the one-year total return came in at 11.4%, total returns over the past three and five years were 45.4% and 65.5%, respectively.

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