MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1MRKX - US58933Y1055 - Common Stock
90.2 EUR
-0.2 (-0.22%)
1MRKX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings could make 1MRKX a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- In the past year 1MRKX was profitable.
- In the past year 1MRKX had a positive cash flow from operations.
- In the past 5 years 1MRKX has always been profitable.
- 1MRKX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- 1MRKX has a Return On Assets of 14.69%. This is amongst the best in the industry. 1MRKX outperforms 89.09% of its industry peers.
- 1MRKX's Return On Equity of 36.71% is amongst the best of the industry. 1MRKX outperforms 90.91% of its industry peers.
- The Return On Invested Capital of 1MRKX (12.83%) is better than 65.45% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for 1MRKX 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
- The Profit Margin of 1MRKX (29.63%) is better than 92.73% of its industry peers.
- 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.
- Looking at the Gross Margin, with a value of 78.72%, 1MRKX is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
- 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.
- 1MRKX has a Altman-Z score (4.09) which is comparable to the rest of the 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 Debt to FCF ratio of 3.17. This is in the better half of the industry: 1MRKX outperforms 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.
- The Debt to Equity ratio of 1MRKX (0.77) 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 has a better Current ratio (1.66) than 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.
- 1MRKX has a better Quick ratio (1.44) than 74.55% of its industry peers.
| 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.
- Measured over the past years, 1MRKX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.04% on average per year.
- Looking at the last year, 1MRKX shows a small growth in Revenue. The Revenue has grown by 1.68% in the last year.
- The Revenue has been growing by 10.40% on average over the past years. This is quite good.
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
- Based on estimates for the next years, 1MRKX will show a small growth in Earnings Per Share. The EPS will grow by 6.65% on average per year.
- 1MRKX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.64% yearly.
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
- A Price/Earnings ratio of 11.92 indicates a reasonable valuation of 1MRKX.
- Based on the Price/Earnings ratio, 1MRKX is valued cheaper than 81.82% of the companies in the same industry.
- 1MRKX is valuated cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- 1MRKX is valuated reasonably with a Price/Forward Earnings ratio of 11.37.
- Based on the Price/Forward Earnings ratio, 1MRKX is valued a bit cheaper than 78.18% of the companies in the same industry.
- 1MRKX is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 11.37 |
4.2 Price Multiples
- 78.18% of the companies in the same industry are more expensive than 1MRKX, based on the Enterprise Value to EBITDA ratio.
- 1MRKX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1MRKX is cheaper than 70.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.97 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
- 1MRKX'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 1MRKX 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
- 1MRKX has a Yearly Dividend Yield of 3.06%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.62, 1MRKX pays a bit more dividend than its industry peers.
- 1MRKX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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%.