Why NYSE:MRK provides a good dividend, while having solid fundamentals.

Last update: Nov 25, 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.

Dividend Assessment of NYSE:MRK

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:MRK was assigned a score of 7 for dividend:

Compared to an average industry Dividend Yield of 4.28, MRK pays a better dividend. On top of this MRK pays more dividend than 93.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.19, MRK pays a bit more dividend than the S&P500 average.
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.

Assessing Health Metrics for NYSE:MRK

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:MRK was assigned a score of 6 for health:

An Altman-Z score of 4.05 indicates that MRK is not in any danger for bankruptcy at the moment.
MRK's Altman-Z score of 4.05 is fine compared to the rest of the industry. MRK outperforms 77.60% of its industry peers.
The Debt to FCF ratio of MRK is 2.57, which is a good value as it means it would take MRK, 2.57 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.57, MRK belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.

A Closer Look at Profitability for NYSE:MRK

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:MRK was assigned a score of 8 for profitability:

MRK has a better Return On Assets (10.34%) than 93.75% of its industry peers.
Looking at the Return On Equity, with a value of 27.30%, MRK belongs to the top of the industry, outperforming 94.79% of the companies in the same industry.
MRK's Return On Invested Capital of 19.49% is amongst the best of the industry. MRK outperforms 95.83% of its industry peers.
The last Return On Invested Capital (19.49%) for MRK is above the 3 year average (12.63%), which is a sign of increasing profitability.
The Profit Margin of MRK (19.23%) is better than 92.71% of its industry peers.
With an excellent Operating Margin value of 34.34%, MRK belongs to the best of the industry, outperforming 96.35% of the companies in the same industry.
MRK's Gross Margin of 76.59% is amongst the best of the industry. MRK outperforms 83.85% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.