Balancing Dividends and Fundamentals: The Case of NYSE:MRK.

Our stock screening tool has identified MERCK & CO. INC. (NYSE:MRK) as a strong dividend contender with robust fundamentals. NYSE:MRK exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

ChartMill's Evaluation of Dividend

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NYSE:MRK has received a 7 out of 10:

• MRK's Dividend Yield is rather good when compared to the industry average which is at 4.30. MRK pays more dividend than 93.01% of the companies in the same industry.
• MRK's Dividend Yield is a higher than the S&P500 average which is at 2.27.
• 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• MRK's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Health Assessment of NYSE:MRK

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:MRK, the assigned 6 reflects its health status:

• An Altman-Z score of 4.02 indicates that MRK is not in any danger for bankruptcy at the moment.
• MRK's Altman-Z score of 4.02 is fine compared to the rest of the industry. MRK outperforms 76.88% 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 has a better Debt to FCF ratio (2.57) than 93.55% of its industry peers.

Evaluating Profitability: NYSE:MRK

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:MRK scores a 8 out of 10:

• MRK's Return On Assets of 10.34% is amongst the best of the industry. MRK outperforms 94.09% of its industry peers.
• With an excellent Return On Equity value of 27.30%, MRK belongs to the best of the industry, outperforming 95.16% 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 95.70% of its industry peers.
• The 3 year average ROIC (12.63%) for MRK is below the current ROIC(19.49%), indicating increased profibility in the last year.
• MRK's Profit Margin of 19.23% is amongst the best of the industry. MRK outperforms 92.47% of its industry peers.
• MRK has a Operating Margin of 34.34%. This is amongst the best in the industry. MRK outperforms 95.70% of its industry peers.
• MRK has a better Gross Margin (76.59%) than 82.80% of its industry peers.

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

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

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.