Should You Invest in Merck?

PHOTO CREDIT: Merck

OVERVIEW

Merck & Co. Incorporation is a biotech and pharmaceutical company. They offer drugs and other treatments for cardiovascular, Type 2 Diabetes, and other viruses and diseases. They also offer medications for animals such as dogs and cats. It sells these products to medical drug wholesalers, hospitals, and other healthcare products.

Why you Should?

1. Merck offers a wide range of products. They offer everything from drugs to prevent fleas in dogs and cats as well as products such as Keytruda that prevents the need for chemotherapy for some kinds of cancers. This wide range of products means that Merck will always have some demand for their products and will benefit the company.
2. Merck offers several essential products to its consumers. This makes it a safe investment during weak economic times, recessions, and depressions. Medications are still essential regardless of the economic times and this is why Merck is a safe and “recession-proof” investment.
3. The COVID-19 Pandemic has provided the possibility of upside to Merck’s stock. Merck is in the process of developing a COVID-19 Vaccine for use. If this company develops this quickly, it will see strong top and bottom-line growth because a vaccine will be in high demand around the entire world.
4. Merck has seen rising profits and revenues over the past couple of financial years due to the reasons mentioned before. This growth will benefit the company’s future growth and will help them build a stronger balance sheet. In the financial year of 2019, the company reported revenues of around 46.8 billion and profits of 9.8 billion. Both of these metrics are higher than what the company reported in the financial year of 2018. The company reported revenues of around 42.3 billion and profits of around 6.2 billion at this time.

PHOTO CREDIT: Yahoo Finance

Why You Should Not?

1. Merck faces tough competition from several other companies in the biotech and pharma industry. Companies like Regeneron, Pfizer, Bristol-Myers Squibb, and Johnson & Johnson offer products that compete with the ones that Merck offers. This might hurt the company’s future growth.
2. The political landscape might hurt the company in the future. Politicians from both sides of the aisle want to reduce drug prices in the United States. This will hurt Merck’s top and bottom line and will negatively impact the stock in the future.
3. The COVID-19 Pandemic has also hurt Merck’s results. This is because consumers are delaying treatments and other operations due to the pandemic. Merck has seen lower drug sales related to optional treatments and procedures because of this.

MY OPINION

In my opinion, I think that Merck is a great long-term investment due to promising treatments and new drugs in the pipeline. Merck is also a safe investment due to the essential products that they sell. However, the political landscape and tough competition might hurt the company in the future.