NYSE:MRK stands out as a stock that provides good value for the fundamentals it showcases.

Our stock screener has spotted MERCK & CO. INC. (NYSE:MRK) as an undervalued stock with solid fundamentals. NYSE:MRK shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

A Closer Look at Valuation for NYSE:MRK

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:MRK has achieved a 9 out of 10:

• 85.34% of the companies in the same industry are more expensive than MRK, based on the Price/Earnings ratio.
• Compared to an average S&P500 Price/Earnings ratio of 29.25, MRK is valued a bit cheaper.
• With a Price/Forward Earnings ratio of 10.53, the valuation of MRK can be described as very reasonable.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of MRK indicates a rather cheap valuation: MRK is cheaper than 86.91% of the companies listed in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 23.78. MRK is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MRK indicates a rather cheap valuation: MRK is cheaper than 84.29% of the companies listed in the same industry.
• 85.86% of the companies in the same industry are more expensive than MRK, based on the Price/Free Cash Flow ratio.
• MRK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of MRK may justify a higher PE ratio.
• A more expensive valuation may be justified as MRK's earnings are expected to grow with 92.48% in the coming years.

What does the Profitability looks like for NYSE:MRK

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:MRK, the assigned 8 is a significant indicator of profitability:

• MRK has a Return On Assets of 10.34%. This is amongst the best in the industry. MRK outperforms 93.72% of its industry peers.
• MRK has a better Return On Equity (27.30%) than 94.76% of its industry peers.
• MRK's Return On Invested Capital of 19.49% is amongst the best of the industry. MRK outperforms 95.81% 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.
• MRK's Profit Margin of 19.23% is amongst the best of the industry. MRK outperforms 92.67% of its industry peers.
• The Operating Margin of MRK (34.34%) is better than 95.81% of its industry peers.
• With an excellent Gross Margin value of 76.59%, MRK belongs to the best of the industry, outperforming 83.25% of the companies in the same industry.

Understanding NYSE:MRK's Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:MRK, the assigned 6 for health provides valuable insights:

• MRK has an Altman-Z score of 4.06. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
• MRK has a better Altman-Z score (4.06) than 78.01% of its industry peers.
• MRK has a debt to FCF ratio of 2.57. This is a good value and a sign of high solvency as MRK would need 2.57 years to pay back of all of its debts.
• MRK's Debt to FCF ratio of 2.57 is amongst the best of the industry. MRK outperforms 93.72% of its industry peers.

Growth Assessment of NYSE:MRK

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:MRK has received a 5 out of 10:

• The Earnings Per Share has grown by an impressive 92.56% over the past year.
• Based on estimates for the next years, MRK will show a very strong growth in Earnings Per Share. The EPS will grow by 53.11% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of MRK contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.