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. While 1MRKX belongs to the best of the industry regarding profitability, 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.
- 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
- 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.
- The Return On Equity of 1MRKX (36.71%) is better than 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
- 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.
- 1MRKX's Profit Margin has been stable in the last couple of years.
- 1MRKX's Operating Margin of 38.08% is amongst the best of 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), 1MRKX is creating some value.
- Compared to 1 year ago, 1MRKX has about the same amount of shares outstanding.
- Compared to 5 years ago, 1MRKX has less shares outstanding
- Compared to 1 year ago, 1MRKX has an improved debt to assets ratio.
2.2 Solvency
- 1MRKX has an Altman-Z score of 4.09. This indicates that 1MRKX is financially healthy and has little risk of bankruptcy at the moment.
- 1MRKX has a Altman-Z score (4.09) which is comparable to the rest of the industry.
- The Debt to FCF ratio of 1MRKX is 3.17, which is a good value as it means it would take 1MRKX, 3.17 years of fcf income to pay off all of its debts.
- 1MRKX's Debt to FCF ratio of 3.17 is fine compared to the rest 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.
- 1MRKX's Debt to Equity ratio of 0.77 is in line compared to the rest of the industry. 1MRKX outperforms 45.45% of its industry peers.
| 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.
- Looking at the Current ratio, with a value of 1.66, 1MRKX is in the better half of the industry, outperforming 67.27% of the companies in the same industry.
- 1MRKX has a Quick Ratio of 1.44. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting 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.
- The Earnings Per Share has been growing by 8.04% on average over the past years. This is quite good.
- 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
- The Earnings Per Share is expected to grow by 6.65% on average over the next years.
- 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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- 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
- With a Price/Earnings ratio of 11.92, the valuation of 1MRKX can be described as very reasonable.
- Based on the Price/Earnings ratio, 1MRKX is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.60. 1MRKX is valued rather cheaply when compared to this.
- The Price/Forward Earnings ratio is 11.37, which indicates a very decent valuation of 1MRKX.
- 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 25.83, 1MRKX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 11.37 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, 1MRKX is valued a bit cheaper than 78.18% of the companies in the same industry.
- 70.91% of the companies in the same industry are more expensive than 1MRKX, based on the Price/Free Cash Flow ratio.
| 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.
- 1MRKX's Dividend Yield is a higher than the industry average which is at 1.62.
- 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%.