MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
BIT:1MRKX - Borsa Italiana Milan - US58933Y1055 - Common Stock - Currency: EUR
1MRKX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 52 industry peers in the Pharmaceuticals industry. 1MRKX has an excellent profitability rating, but there are some minor concerns on its financial health. 1MRKX may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make 1MRKX suitable 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.
1MRKX had positive earnings in each of the past 5 years.
1MRKX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.34%, 1MRKX is in the better half of the industry, outperforming 79.17% of the companies in the same industry.
1MRKX has a Return On Equity of 27.30%. This is amongst the best in the industry. 1MRKX outperforms 83.33% of its industry peers.
1MRKX's Return On Invested Capital of 13.36% is fine compared to the rest of the industry. 1MRKX outperforms 70.83% of its industry peers.
1MRKX had an Average Return On Invested Capital over the past 3 years of 8.66%. This is below the industry average of 12.45%.
The last Return On Invested Capital (13.36%) for 1MRKX is above the 3 year average (8.66%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.34% | ||
| ROE | 27.3% | ||
| ROIC | 13.36% |
ROA(3y)8.66%
ROA(5y)9.07%
ROE(3y)22.24%
ROE(5y)26.52%
ROIC(3y)8.66%
ROIC(5y)8.79%
1.3 Margins
1MRKX has a better Profit Margin (19.23%) than 83.33% of its industry peers.
1MRKX's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 34.34%, 1MRKX belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
1MRKX's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 76.59%, 1MRKX is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Gross Margin of 1MRKX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.34% | ||
| PM (TTM) | 19.23% | ||
| GM | 76.59% |
OM growth 3Y-36.42%
OM growth 5Y-24.03%
PM growth 3Y-67.08%
PM growth 5Y-47.14%
GM growth 3Y0.65%
GM growth 5Y1.25%
2. Health
2.1 Basic Checks
1MRKX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for 1MRKX has been reduced compared to 1 year ago.
Compared to 5 years ago, 1MRKX has less shares outstanding
1MRKX has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.02 indicates that 1MRKX is not in any danger for bankruptcy at the moment.
1MRKX's Altman-Z score of 4.02 is fine compared to the rest of the industry. 1MRKX outperforms 62.50% of its industry peers.
The Debt to FCF ratio of 1MRKX is 2.57, which is a good value as it means it would take 1MRKX, 2.57 years of fcf income to pay off all of its debts.
1MRKX has a Debt to FCF ratio of 2.57. This is in the better half of the industry: 1MRKX outperforms 75.00% of its industry peers.
A Debt/Equity ratio of 0.79 indicates that 1MRKX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.79, 1MRKX is doing worse than 64.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 2.57 | ||
| Altman-Z | 4.02 |
ROIC/WACC1.49
WACC8.98%
2.3 Liquidity
1MRKX has a Current Ratio of 1.36. 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 Current ratio (1.36) which is in line with its industry peers.
1MRKX has a Quick Ratio of 1.15. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of 1MRKX (1.15) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 92.56% over the past year.
The earnings per share for 1MRKX have been decreasing by -19.14% on average. This is quite bad
The Revenue has been growing slightly by 6.51% in the past year.
Measured over the past years, 1MRKX shows a small growth in Revenue. The Revenue has been growing by 7.29% on average per year.
EPS 1Y (TTM)92.56%
EPS 3Y-36.76%
EPS 5Y-19.14%
EPS Q2Q%-26.29%
Revenue 1Y (TTM)6.51%
Revenue growth 3Y13.13%
Revenue growth 5Y7.29%
Sales Q2Q%4.35%
3.2 Future
1MRKX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 53.11% yearly.
1MRKX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.82% yearly.
EPS Next Y422.29%
EPS Next 2Y151.61%
EPS Next 3Y92.55%
EPS Next 5Y53.11%
Revenue Next Year6.69%
Revenue Next 2Y5.73%
Revenue Next 3Y5.9%
Revenue Next 5Y5.82%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
1MRKX is valuated correctly with a Price/Earnings ratio of 16.39.
1MRKX's Price/Earnings ratio is a bit cheaper when compared to the industry. 1MRKX is cheaper than 68.75% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.47. 1MRKX is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 10.27, the valuation of 1MRKX can be described as very reasonable.
1MRKX's Price/Forward Earnings ratio is rather cheap when compared to the industry. 1MRKX is cheaper than 83.33% of the companies in the same industry.
1MRKX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 92.74.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.39 | ||
| Fwd PE | 10.27 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1MRKX is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 77.08% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.63 | ||
| EV/EBITDA | 10.41 |
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.
1MRKX has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as 1MRKX's earnings are expected to grow with 92.55% in the coming years.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y151.61%
EPS Next 3Y92.55%
5. Dividend
5.1 Amount
1MRKX has a Yearly Dividend Yield of 3.13%.
1MRKX's Dividend Yield is a higher than the industry average which is at 2.69.
1MRKX's Dividend Yield is a higher than the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.13% |
5.2 History
The dividend of 1MRKX is nicely growing with an annual growth rate of 8.47%!
Dividend Growth(5Y)8.47%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
1MRKX pays out 63.72% of its income as dividend. This is not a sustainable payout ratio.
The dividend of 1MRKX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.72%
EPS Next 2Y151.61%
EPS Next 3Y92.55%
MERCK & CO. INC.
BIT:1MRKX (1/29/2025, 7:00:00 PM)
94.4
+1.4 (+1.51%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst OwnersN/A
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap238.80B
Analysts81.21
Price Target130.59 (38.34%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.13% |
Yearly Dividend2.94
Dividend Growth(5Y)8.47%
DP63.72%
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.07%
Min EPS beat(2)3.35%
Max EPS beat(2)4.78%
EPS beat(4)4
Avg EPS beat(4)36.16%
Min EPS beat(4)3.35%
Max EPS beat(4)127.21%
EPS beat(8)8
Avg EPS beat(8)21.03%
EPS beat(12)12
Avg EPS beat(12)18.06%
EPS beat(16)13
Avg EPS beat(16)12.99%
Revenue beat(2)2
Avg Revenue beat(2)0.46%
Min Revenue beat(2)0.2%
Max Revenue beat(2)0.71%
Revenue beat(4)3
Avg Revenue beat(4)0.9%
Min Revenue beat(4)-0.09%
Max Revenue beat(4)2.78%
Revenue beat(8)7
Avg Revenue beat(8)1.76%
Revenue beat(12)11
Avg Revenue beat(12)2.68%
Revenue beat(16)13
Avg Revenue beat(16)0.5%
PT rev (1m)0.75%
PT rev (3m)-3.05%
EPS NQ rev (1m)-12.28%
EPS NQ rev (3m)-12.28%
EPS NY rev (1m)-3.82%
EPS NY rev (3m)-4.89%
Revenue NQ rev (1m)-2.78%
Revenue NQ rev (3m)-2.78%
Revenue NY rev (1m)-0.18%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.39 | ||
| Fwd PE | 10.27 | ||
| P/S | 3.91 | ||
| P/FCF | 16.63 | ||
| P/OCF | 13.51 | ||
| P/B | 5.55 | ||
| P/tB | 42.59 | ||
| EV/EBITDA | 10.41 |
EPS(TTM)5.76
EY6.1%
EPS(NY)9.19
Fwd EY9.73%
FCF(TTM)5.68
FCFY6.01%
OCF(TTM)6.99
OCFY7.4%
SpS24.16
BVpS17.02
TBVpS2.22
PEG (NY)0.04
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.34% | ||
| ROE | 27.3% | ||
| ROCE | 24.67% | ||
| ROIC | 13.36% | ||
| ROICexc | 16.02% | ||
| ROICexgc | 33.91% | ||
| OM | 34.34% | ||
| PM (TTM) | 19.23% | ||
| GM | 76.59% | ||
| FCFM | 23.49% |
ROA(3y)8.66%
ROA(5y)9.07%
ROE(3y)22.24%
ROE(5y)26.52%
ROIC(3y)8.66%
ROIC(5y)8.79%
ROICexc(3y)9.91%
ROICexc(5y)10.17%
ROICexgc(3y)23.75%
ROICexgc(5y)25.82%
ROCE(3y)15.99%
ROCE(5y)16.24%
ROICexcg growth 3Y-38.8%
ROICexcg growth 5Y-25.67%
ROICexc growth 3Y-34.34%
ROICexc growth 5Y-24.16%
OM growth 3Y-36.42%
OM growth 5Y-24.03%
PM growth 3Y-67.08%
PM growth 5Y-47.14%
GM growth 3Y0.65%
GM growth 5Y1.25%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 2.57 | ||
| Debt/EBITDA | 1.35 | ||
| Cap/Depr | 80.26% | ||
| Cap/Sales | 5.42% | ||
| Interest Coverage | 17.44 | ||
| Cash Conversion | 70.35% | ||
| Profit Quality | 122.16% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 4.02 |
F-Score7
WACC8.98%
ROIC/WACC1.49
Cap/Depr(3y)116.81%
Cap/Depr(5y)114.51%
Cap/Sales(3y)7.65%
Cap/Sales(5y)8.5%
Profit Quality(3y)893.42%
Profit Quality(5y)572.79%
High Growth Momentum
Growth
EPS 1Y (TTM)92.56%
EPS 3Y-36.76%
EPS 5Y-19.14%
EPS Q2Q%-26.29%
EPS Next Y422.29%
EPS Next 2Y151.61%
EPS Next 3Y92.55%
EPS Next 5Y53.11%
Revenue 1Y (TTM)6.51%
Revenue growth 3Y13.13%
Revenue growth 5Y7.29%
Sales Q2Q%4.35%
Revenue Next Year6.69%
Revenue Next 2Y5.73%
Revenue Next 3Y5.9%
Revenue Next 5Y5.82%
EBIT growth 1Y4.37%
EBIT growth 3Y-28.07%
EBIT growth 5Y-18.5%
EBIT Next Year348.53%
EBIT Next 3Y78.64%
EBIT Next 5Y45.4%
FCF growth 1Y-2.68%
FCF growth 3Y16.22%
FCF growth 5Y1.94%
OCF growth 1Y-7.27%
OCF growth 3Y8.25%
OCF growth 5Y3.55%