1 Unexcitingly Good Dividend Play

Merck (NYS: MRK) saw first-quarter revenue increase by 1% year-over-year. Woot!

Not thrilling? What if I told you that the sales were negatively affected 1% from changes in foreign exchanges and decreased 2% because it stopped selling Remicade and Simponi in certain territories after a settlement with Johnson & Johnson (NYS: JNJ) .

Excited now? No? Me neither.

Merck is in a holding pattern with a series of drugs facing generic competition. Right now it's Merck's heart drugs Cozaar and Hyzaar, which plummeted 21% in the first quarter. Upcoming is top-selling Singulair, which will begin seeing generic competition in the U.S. in August. The company hopes to keep 2012 sales constant compared to last year, which at current exchange rates means a 2%-3% drop.

Of course, the silver lining is that Merck can keep sales constant in the face of the pressures. Its diabetes drugs Januvia and Janumet and HIV treatment Isentress all had monster quarters with double-digit growth. Even blast-from-the-past Gardasil, which seemed to have died as a growth story, sprang to life with a 33% year-over-year increase in sales thanks to males getting vaccinated and a launch in Japan.

Management seems pretty adamant about not following in the breaking-up-the-company footsteps of Pfizer (NYS: PFE) , Bristol-Myers Squibb (NYS: BMY) , and Abbott Labs (NYS: ABT) . That seems reasonable, because even if the animal health and consumer health divisions could fetch a higher valuation than investors are assigning, they contributed only 7% and 5% of sales, respectively. And besides, they're both growing faster than the pharmaceuticals division.

Where does that leave investors? Sit and wait for better days. The patent cliff can't last forever, and Merck actually has a decent pipeline, so there's potential for growth, albeit with risk. Fortunately, unlike your typical biotech, where you'd have to wait for clinical trial results and regulatory approvals, Merck investors get paid a handsome 4.4% dividend while they wait.

Dividend producers like Merck might not be the most exciting companies to own, but they can be worth it. You can find nine more ideas in the Fool's free report "Secure Your Future With 9 Rock-Solid Dividend Stocks." Just click here to get your copy.

At the time thisarticle was published Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson and Abbott Laboratories. Motley Fool newsletter services have recommended buying shares of Pfizer and Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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