MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1MRKX - US58933Y1055 - Common Stock
90.2 EUR
-0.2 (-0.22%)
Overall 1MRKX gets a fundamental rating of 7 out of 10. We evaluated 1MRKX against 55 industry peers in the Pharmaceuticals industry. 1MRKX has an excellent profitability rating, but there are some minor concerns on its financial health. 1MRKX is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make 1MRKX a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- 1MRKX had positive earnings in the past year.
- 1MRKX had a positive operating cash flow in the past year.
- In the past 5 years 1MRKX has always been profitable.
- In the past 5 years 1MRKX always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of 1MRKX (14.69%) is better than 89.09% of its industry peers.
- 1MRKX has a better Return On Equity (36.71%) than 90.91% of its industry peers.
- 1MRKX has a better Return On Invested Capital (12.83%) than 65.45% of its industry peers.
- 1MRKX had an Average Return On Invested Capital over the past 3 years of 13.67%. This is in line with the industry average of 14.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROIC | 12.83% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)13.67%
ROIC(5y)12.02%
1.3 Margins
- With an excellent Profit Margin value of 29.63%, 1MRKX belongs to the best of the industry, outperforming 92.73% of the companies in the same industry.
- In the last couple of years the Profit Margin of 1MRKX has remained more or less at the same level.
- 1MRKX has a Operating Margin of 38.08%. This is amongst the best in the industry. 1MRKX outperforms 90.91% of its industry peers.
- In the last couple of years the Operating Margin of 1MRKX has grown nicely.
- 1MRKX has a better Gross Margin (78.72%) than 80.00% of its industry peers.
- 1MRKX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.08% | ||
| PM (TTM) | 29.63% | ||
| GM | 78.72% |
OM growth 3Y5.75%
OM growth 5Y7.99%
PM growth 3Y-0.15%
PM growth 5Y1.18%
GM growth 3Y1.92%
GM growth 5Y1.45%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so 1MRKX is still creating some value.
- The number of shares outstanding for 1MRKX remains at a similar level compared to 1 year ago.
- 1MRKX has less shares outstanding than it did 5 years ago.
- 1MRKX has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.09 indicates that 1MRKX is not in any danger for bankruptcy at the moment.
- With a Altman-Z score value of 4.09, 1MRKX perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
- 1MRKX has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as 1MRKX would need 3.17 years to pay back of all of its debts.
- 1MRKX has a better Debt to FCF ratio (3.17) than 70.91% of its industry peers.
- 1MRKX has a Debt/Equity ratio of 0.77. This is a neutral value indicating 1MRKX is somewhat dependend on debt financing.
- 1MRKX has a Debt to Equity ratio (0.77) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.09 |
ROIC/WACC1.46
WACC8.79%
2.3 Liquidity
- 1MRKX has a Current Ratio of 1.66. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting its short term obligations.
- 1MRKX's Current ratio of 1.66 is fine compared to the rest of the industry. 1MRKX outperforms 67.27% of its industry peers.
- A Quick Ratio of 1.44 indicates that 1MRKX should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.44, 1MRKX is in the better half of the industry, outperforming 74.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 48.07% over the past year.
- 1MRKX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.04% yearly.
- Looking at the last year, 1MRKX shows a small growth in Revenue. The Revenue has grown by 1.68% in the last year.
- 1MRKX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.40% yearly.
EPS 1Y (TTM)48.07%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%70.7%
Revenue 1Y (TTM)1.68%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%3.72%
3.2 Future
- 1MRKX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.65% yearly.
- The Revenue is expected to grow by 2.64% on average over the next years.
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.64%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 11.92, which indicates a very decent valuation of 1MRKX.
- Based on the Price/Earnings ratio, 1MRKX is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
- 1MRKX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.39.
- With a Price/Forward Earnings ratio of 11.37, the valuation of 1MRKX can be described as very reasonable.
- 78.18% of the companies in the same industry are more expensive than 1MRKX, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, 1MRKX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 11.37 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 78.18% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 70.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.97 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- 1MRKX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.64
PEG (5Y)1.48
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.06%, 1MRKX has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.62, 1MRKX pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, 1MRKX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
5.2 History
- The dividend of 1MRKX is nicely growing with an annual growth rate of 6.90%!
Dividend Growth(5Y)6.9%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 42.60% of the earnings are spent on dividend by 1MRKX. This is a bit on the high side, but may be sustainable.
- The dividend of 1MRKX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP42.6%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
MERCK & CO. INC. / 1MRKX.MI FAQ
What is the ChartMill fundamental rating of MERCK & CO. INC. (1MRKX.MI) stock?
ChartMill assigns a fundamental rating of 7 / 10 to 1MRKX.MI.
Can you provide the valuation status for MERCK & CO. INC.?
ChartMill assigns a valuation rating of 8 / 10 to MERCK & CO. INC. (1MRKX.MI). This can be considered as Undervalued.
What is the profitability of 1MRKX stock?
MERCK & CO. INC. (1MRKX.MI) has a profitability rating of 8 / 10.
What are the PE and PB ratios of MERCK & CO. INC. (1MRKX.MI) stock?
The Price/Earnings (PE) ratio for MERCK & CO. INC. (1MRKX.MI) is 11.92 and the Price/Book (PB) ratio is 5.03.
Is the dividend of MERCK & CO. INC. sustainable?
The dividend rating of MERCK & CO. INC. (1MRKX.MI) is 6 / 10 and the dividend payout ratio is 42.6%.