Merck and Amgen Dividends Compared for Long-Term Income
Merck and Amgen each cover their dividends with about 52% of free cash flow, but Amgen offers a slightly higher yield and faster historical dividend growth. Amgen also carries more leverage, with net debt at 2.5 times EBITDA versus 1.6 times at Merck. Merck's revenue growth is supported by Keytruda and newer products, while Amgen's dividend record is backed by its own cash generation.
Merck's second-quarter 2026 revenue reached $16.6 billion, a 5% gain, helped by Keytruda's $8.4 billion and Winrevair's 75% jump to $588 million. Amgen's top line climbed 10% to $10.1 billion, with six growth products up 26%.
Both firms devote 52% of trailing free cash flow to dividends, though Amgen's net debt sits at 2.47 times EBITDA versus Merck's 1.6 times, and its interest coverage is 4.14 times against 13.47 times. Amgen's payout rose 8.3% annually from fiscal 2020 to 2025, compared with 5.8% at Merck.
Income-focused investors, including retirees, may weigh these two payouts when allocating savings. Amgen's faster dividend growth could appeal to those seeking rising income, while its heavier debt load may introduce more sensitivity to rate or earnings shifts. Merck's stronger balance sheet could suit more conservative holders. Broader societal effects are likely limited, since dividend decisions mainly affect shareholders and, indirectly, how much capital stays available for drug development.