Why NYSE:MRK is a Top Pick for Dividend Investors.

Last update: Nov 4, 2024

Take a closer look at MERCK & CO. INC. (NYSE:MRK), a stock of interest to dividend investors uncovered by our stock screener. NYSE:MRK excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Analyzing Dividend Metrics

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NYSE:MRK has been assigned a 8 for dividend:

MRK's Dividend Yield is rather good when compared to the industry average which is at 4.10. MRK pays more dividend than 92.71% of the companies in the same industry.
MRK's Dividend Yield is a higher than the S&P500 average which is at 2.25.
On average, the dividend of MRK grows each year by 8.47%, which is quite nice.
MRK has paid a dividend for at least 10 years, which is a reliable track record.
MRK has not decreased their dividend for at least 10 years, which is a reliable track record.
The dividend of MRK is growing, but earnings are growing more, so the dividend growth is sustainable.

How do we evaluate the Health for NYSE:MRK?

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:MRK has achieved a 6 out of 10:

An Altman-Z score of 4.20 indicates that MRK is not in any danger for bankruptcy at the moment.
The Altman-Z score of MRK (4.20) is better than 77.08% of its industry peers.
The Debt to FCF ratio of MRK is 2.87, which is a good value as it means it would take MRK, 2.87 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MRK (2.87) is better than 91.67% of its industry peers.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:MRK, the assigned 8 is noteworthy for profitability:

The Return On Assets of MRK (12.20%) is better than 95.83% of its industry peers.
MRK's Return On Equity of 31.52% is amongst the best of the industry. MRK outperforms 95.31% of its industry peers.
With an excellent Return On Invested Capital value of 16.35%, MRK belongs to the best of the industry, outperforming 93.23% of the companies in the same industry.
The 3 year average ROIC (12.63%) for MRK is below the current ROIC(16.35%), indicating increased profibility in the last year.
MRK's Profit Margin of 21.98% is amongst the best of the industry. MRK outperforms 94.27% of its industry peers.
MRK's Operating Margin of 28.68% is amongst the best of the industry. MRK outperforms 94.27% of its industry peers.
The Gross Margin of MRK (75.79%) is better than 82.81% of its industry peers.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of MRK

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.