In a market where value is scarce, MERCK & CO. INC. (NYSE:MRK) offers a refreshing opportunity with its solid fundamentals.

Our stock screener has singled out MERCK & CO. INC. (NYSE:MRK) as a stellar value proposition. NYSE:MRK not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Insights: NYSE:MRK

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:MRK was assigned a score of 9 for valuation:

• Based on the Price/Earnings ratio, MRK is valued cheaply inside the industry as 90.63% of the companies are valued more expensively.
• MRK's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.35.
• The Price/Forward Earnings ratio is 10.43, which indicates a very decent valuation of MRK.
• MRK's Price/Forward Earnings ratio is rather cheap when compared to the industry. MRK is cheaper than 88.02% of the companies in the same industry.
• MRK is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
• MRK's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MRK is cheaper than 86.46% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, MRK is valued cheaper than 88.54% of the companies in the same industry.
• 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.
• MRK's earnings are expected to grow with 12.83% in the coming years. This may justify a more expensive valuation.

Profitability Examination for NYSE:MRK

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:MRK has earned a 8 out of 10:

• The Return On Assets of MRK (10.34%) is better than 94.27% of its industry peers.
• The Return On Equity of MRK (27.30%) is better than 95.83% of its industry peers.
• MRK has a better Return On Invested Capital (19.49%) than 95.83% of its industry peers.
• With an excellent Profit Margin value of 19.23%, MRK belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
• With an excellent Operating Margin value of 34.34%, MRK belongs to the best of the industry, outperforming 95.83% of the companies in the same industry.
• In the last couple of years the Operating Margin of MRK has grown nicely.
• MRK has a Gross Margin of 76.59%. This is amongst the best in the industry. MRK outperforms 83.33% of its industry peers.
• MRK's Gross Margin has improved in the last couple of years.

Exploring NYSE:MRK's 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 5 out of 10:

• MRK has an Altman-Z score of 3.94. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of MRK (3.94) is better than 78.13% 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.
• With an excellent Debt to FCF ratio value of 2.57, MRK belongs to the best of the industry, outperforming 92.71% of the companies in the same industry.

Evaluating Growth: NYSE:MRK

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:MRK scores a 5 out of 10:

• MRK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 409.33%, which is quite impressive.
• Measured over the past years, MRK shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.04% on average per year.
• Measured over the past years, MRK shows a quite strong growth in Revenue. The Revenue has been growing by 10.40% on average per year.

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 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.