NYSE:MRK: good value for what you're paying.

Last update: Jan 2, 2025

Uncover the potential of MERCK & CO. INC. (NYSE:MRK) as our stock screener's choice for an undervalued stock. NYSE:MRK maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Valuation Analysis for NYSE:MRK

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:MRK has received a 9 out of 10:

Based on the Price/Earnings ratio, MRK is valued cheaper than 85.33% of the companies in the same industry.
When comparing the Price/Earnings ratio of MRK to the average of the S&P500 Index (27.17), we can say MRK is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 10.38, the valuation of MRK can be described as reasonable.
87.50% of the companies in the same industry are more expensive than MRK, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.59, MRK is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, MRK is valued cheaper than 84.24% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MRK is valued cheaply inside the industry as 85.87% of the companies are valued more expensively.
The 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 92.36% in the coming years.

Profitability Examination 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:

Looking at the Return On Assets, with a value of 10.34%, MRK belongs to the top of the industry, outperforming 94.02% of the companies in the same industry.
MRK has a Return On Equity of 27.30%. This is amongst the best in the industry. MRK outperforms 95.11% of its industry peers.
With an excellent Return On Invested Capital value of 19.49%, MRK belongs to the best of the industry, outperforming 95.65% of the companies in the same industry.
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.
With an excellent Profit Margin value of 19.23%, MRK belongs to the best of the industry, outperforming 92.39% of the companies in the same industry.
MRK has a better Operating Margin (34.34%) than 95.65% of its industry peers.
MRK's Gross Margin of 76.59% is amongst the best of the industry. MRK outperforms 82.61% of its industry peers.

ChartMill's Evaluation of Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:MRK has received a 6 out of 10:

An Altman-Z score of 4.06 indicates that MRK is not in any danger for bankruptcy at the moment.
MRK has a better Altman-Z score (4.06) than 77.17% 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.
With an excellent Debt to FCF ratio value of 2.57, MRK belongs to the best of the industry, outperforming 94.02% of the companies in the same industry.

Understanding NYSE:MRK's Growth Score

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:MRK boasts a 5 out of 10:

The Earnings Per Share has grown by an impressive 92.56% over the past year.
MRK is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 50.47% yearly.
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.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

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.