From 24/7 Wall St. · Chris Lange · · 1m 50s
Amgen vs Merck: which dividend keeps growing?
Two pharma giants both raise dividends yearly, but only one has the portfolio depth to survive the next patent cliff.
In brief
Two pharma giants both raise dividends yearly, but only one has the portfolio depth to survive the next patent cliff. Amgen's broader product base of 17 billion-dollar products makes its dividend more durable than Merck's reliance on the $8.4 billion Keytruda franchise facing patent expiration. Originally reported by…
The dividend showdown begins
Amgen pays $2.52 quarterly ($10.08 annualized) for a 2.6% yield. Merck pays $0.85 quarterly ($3.40 annualized) for a 2.29% yield. Both raise annually, but the real question is which can keep raising through patent expirations.
Amgen raises faster and more consistently
Amgen increased its quarterly dividend from $2.13 in 2023 to $2.52 in 2026, with consistent 6% annual raises. Merck went from $0.73 to $0.85 over the same period with smaller percentage increases.
Merck's Keytruda faces a cliff
Merck's Keytruda franchise generated $8.4 billion in Q2 2026 sales but is reaching peak penetration. The company is betting on 20 new products to replace it, but that's pipeline risk, not proven income.
“total U.S. Keytruda year-over-year growth will moderate as we increasingly reach peak penetration”
Amgen has 17 billion-dollar products
Amgen reported 17 products annualizing above $1 billion in Q2 2026, with six growth drivers (Repatha, Evenity, Tezspire, rare disease, oncology, biosimilars) growing 26% collectively and representing 70% of sales.
Amgen already weathering biosimilar hits
Prolia and Xgeva combined fell 33% in Q2 2026 due to biosimilar erosion, yet Amgen still raised its dividend. The company generated $3.5 billion in free cash flow that quarter.
The debt question for Amgen
Amgen carries $57.3 billion in debt at 3.2x EBITDA, higher than Merck's investment-grade profile. But $3.5 billion in quarterly free cash flow easily covers the $1.4 billion quarterly payout.
Amgen wins for dividend durability
Amgen pays more today, raises faster, and rests on 17 billion-dollar products rather than one $8 billion franchise. For retirement income, Amgen is the safer choice through the next patent cliff.
The one thing
Amgen's broader product base of 17 billion-dollar products makes its dividend more durable than Merck's reliance on the $8.4 billion Keytruda franchise facing patent expiration.
