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Wednesday, October 20, 2010

Pharma MNC Merck Announces Results - Dividend Yield @ 10.5%

German pharma major Merck's shares rose nearly 20% hitting upper circuit during the trade on 20 Oct 2010. Merck touched a 52-week high of Rs 909.50 on the BSE. after it gained 19.99% or Rs 151.55 to close at Rs 909.50. There were pending buy orders of 13,827 shares, with no sellers available. The total traded volumes were 406,738 shares.

Merck hit the upper circuit of 20% after the board of directors of the company declared an interim dividend of a massive Rs. 95 per share for the year ending December 2010.

The board declared the huge interim dividend along with the company's Q3 September 2010 results during trading hours on 20 October 2010.

However, the company's second quarter results disappointed the street. Merck's net profit for the quarter was down 5.75% to Rs 24.7 crore from Rs 26.2 crore last year. Its net sales rose 20% to touch Rs 156 crore this quarter versus Rs 130 crore last year.

The company's trailing 12-month (TTM) EPS was at Rs 47.47 per share. (Jun, 2010). The stock's price-to-earnings (P/E) ratio was 19.13. The latest book value of the company is Rs 281.51 per share.

The company has an equity capital of Rs. 16.86 crore. Face value per share is Rs. 10.

The dividend yield based on the current market price of Rs. 909, works out to 10.5%. As per the existing tax laws, dividend is tax-free in shareholders' hands whereas a company pays a dividend distribution tax.