Why This Dow Heavyweight Sank on Earnings

Shares of Dow component Merck slumped 2.6% today after the drugmaker reported its third-quarter results, but not all of the news was bad. Year-over-year non-GAAP earnings per share dropped by a sliver, but the company's bottom line did beat analyst estimates.

The negative market reaction, however, was rooted in the slowing growth of its diabetes franchise. While Januvia continues to be Merck's key blockbuster drug, there are many competing products in the type 2 diabetes space, including products from Bristol-Myers Squibb , AstraZeneca , and Johnson & Johnson. In the following video, from The Motley Fool's health-care show Market Checkup, analysts Max Macaluso and David Williamson discuss the full earnings report and look at both the broader opportunities and risks for this drugmaker. 

Why dividends are for you
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Note: At 0:28, the speaker was referring to a drop in GAAP earnings, which isn't adjusted for one-time charges.

The article Why This Dow Heavyweight Sank on Earnings originally appeared on Fool.com.

Alison Southwick, David Williamson, and Max Macaluso, Ph.D., have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story