Better Pharma Dividend Stock: Novartis Vs. Merck
By Prosper Junior Bakiny – Apr 17, 2026 at 2:37PM EST
Key Points
-
Merck’s outlook is bright despite challenges to its core franchises.
-
Novartis is performing well despite a recent major patent cliff.
-
Both are attractive dividend stocks, but one has the edge right now, partly because of its valuation.
The case for Merck
Merck has faced some challenges in recent years, as its HPV vaccines, Gardasil and Gardasil 9, have seen declining sales due to issues in Asia. Further, Merck may face increased competition in the oncology market, where it is a leader thanks to Keytruda, a medicine approved across many cancers. Despite the obstacles, there are good reasons to stick with Merck. Here’s one: Keytruda remains the world’s best-selling cancer drug.
It will lose patent exclusivity within the next two years, but Merck has earned approval for a new, subcutaneous version of the medicine that is faster and easier to administer, with similar efficacy across many of the original’s indications. Many old and new patients will opt for the new Keytruda.
Expand
NYSE: MRK
Merck
Today’s Change
(3.13%) $3.61
Current Price
$119.07
Key Data Points
Market Cap
$285B
Day’s Range
$115.56 – $119.20
52wk Range
$73.31 – $125.14
Volume
16M
Avg Vol
11M
Gross Margin
74.21%
Dividend Yield
2.88%
Beyond its oncology franchise, Merck has developed — or is still working on — newer drugs that should also drive sales growth over the next five years. It earned approval for Winrevair two years ago. This medicine for pulmonary arterial hypertension exceeded $1 billion in annual sales in 2025, and it should maintain its momentum. The company’s new pneumonia vaccine, Capvaxive, is also posting strong sales growth.
Turning to Merck’s pipeline, one of the company’s most promising programs is CD388, an investigational long-acting antiviral that could revolutionize the influenza vaccine market. Merck has plenty of other attractive pipeline candidates. Lastly, the company has a strong dividend program, with a forward yield of 2.9%, and it has increased its dividends by 93.8% over the past decade.
Merck is a great pick for long-term income seekers.
The case for Novartis
Last year, Novartis lost patent exclusivity in the U.S. for its best-selling drug, Entresto, which treats chronic heart failure. The company’s revenue moved in the right direction in 2025 despite this headwind, and the drugmaker projects that it will, once again, post decent sales growth in 2026. One of Novartis’ strengths is its deep product lineup. Last year, 15 of its medicines generated over $1 billion in annual sales, with most posting year-over-year revenue growth.
Expand
NYSE: NVS
Novartis
Today’s Change
(1.50%) $2.24
Current Price
$151.97
Key Data Points
Market Cap
$274B
Day’s Range
$150.75 – $152.54
52wk Range
$104.93 – $170.46
Volume
1.1M
Avg Vol
2.3M
Gross Margin
75.02%
Dividend Yield
3.17%
Novartis also has a strong pipeline and has launched exciting products in recent years. They include Fabhalta, a medicine for a rare blood disease called paroxysmal nocturnal hemoglobinuria. Fabhalta’s sales are soaring, and the medicine should join the ranks of billion-dollar drugs within a couple of years, as will a few of Novartis’ other medicines that will help replace Entresto.
The drugmaker’s ability to navigate this patent cliff while still maintaining decent sales growth says a lot about the business. Then there is Novartis’ dividend program. The company’s forward yield is 3.1%. Novartis has raised its payouts by 84.2% over the past decade and has done so every year since 1996, an impressive streak that tells us that Novartis’ dividend is very safe.
The verdict
Both companies are great picks for dividend seekers, but I’d give a slight edge to Novartis right now. Here’s why. First, Novartis is far more diversified than Merck. Whereas the latter will almost certainly see sales decline — at least for a little bit — when Keytruda loses patent protection, Novartis is managing the loss of patent exclusivity for its best-selling product surprisingly well. That’s partly because it is far less dependent on Entresto than Merck is on Keytruda. Second, although both companies generate somewhat similar revenue and earnings (with an advantage to Merck in these departments), Novartis’ s look cheaper right now.
NVS Revenue (Annual) data by YCharts
Third, Novartis has a higher yield and better long-term dividend track record than Merck. For those reasons, Novartis is the better option for pharma-focused income-oriented investors right now.
Read Next
•By Matt DiLallo
5 Best High Dividend Mutual Funds to Buy in 2026
•By Lyle Daly
The Largest Healthcare Companies by Market Cap in April 2026
Better Long-Term Buy: Eli Lilly or Viking Therapeutics?
•By Selena Maranjian
The Healthcare Stock Built for Investors Who Prioritize Capital Preservation
The Psychedelic Revolution in Mental Healthcare
Is This the Biggest Game-Changer in Lilly’s 150-Year History?
About the Author
Prosper Junior Bakiny is a contributing Motley Fool healthcare analyst covering biotechnology, pharmaceuticals, and healthcare stocks. Before The Motley Fool, Prosper wrote about investing topics ranging from stock market news to private equity for various companies. He holds a master’s degree in corporate finance from the University of Maryland Global Campus.
Stocks Mentioned
Merck
NYSE: MRK
$119.01
(+3.08%)+$3.55
Novartis
NYSE: NVS
$151.98
(+1.50%)+$2.25
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Sumber Artikel:
Fool.com