Pfizer vs Merck: Which Big Pharma Stock Offers the Best Dividend Play?

Pfizer and Merck, two of the biggest players in the pharmaceutical industry, have recently released their quarterly earnings reports. Pfizer's revenue reached $14.45B, beating estimates, while its COVID franchise struggled with declining sales. In contrast, Merck's revenue hit $16.29B, exceeding expectations, driven by strong sales of Keytruda and Winrevair.

Pfizer's dividend yield stands at 6.75%, with the company paying out $2.4B in dividends in the March quarter. However, its COVID-related products saw significant declines, including Comirnaty falling 59% and Paxlovid dropping 62%. Merck, on the other hand, raised its quarterly dividend from $0.81 to $0.85, starting Q1 2026.

Pfizer is focusing on developing new treatments for obesity and oncology, with 20 pivotal trials scheduled for 2026. The company's Vyndamax patent settlement extends exclusivity in the US until June 2031, providing a safeguard for dividend coverage. Merck, meanwhile, is investing heavily in deals to reload its pipeline behind Keytruda.

While Pfizer offers a higher yield, Merck's growth prospects and pipeline expansion make it an attractive choice for investors seeking long-term gains. Both companies face risks related to pharma tariffs or MFN drug pricing landing harder than expected.