MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1MRKX - US58933Y1055 - Common Stock
90.2 EUR
-0.2 (-0.22%)
We assign a fundamental rating of 7 out of 10 to 1MRKX. 1MRKX was compared to 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! This makes 1MRKX very considerable for value investing!
1. Profitability
1.1 Basic Checks
- 1MRKX had positive earnings in the past year.
- In the past year 1MRKX had a positive cash flow from operations.
- Each year in the past 5 years 1MRKX has been profitable.
- Each year in the past 5 years 1MRKX had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of 1MRKX (14.69%) is better than 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.
- The Average Return On Invested Capital over the past 3 years 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
- 1MRKX has a better Profit Margin (29.63%) 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'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.
- 1MRKX has a better Gross Margin (78.72%) than 80.00% of its industry peers.
- 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 | 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.
- 1MRKX has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, 1MRKX has less shares outstanding
- 1MRKX has a better debt/assets ratio than last year.
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 of 4.09. This is comparable to the rest of the industry: 1MRKX outperforms 54.55% of its industry peers.
- 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.
- Looking at the Debt to FCF ratio, with a value of 3.17, 1MRKX is in the better half of the industry, outperforming 70.91% of the companies in the same industry.
- 1MRKX has a Debt/Equity ratio of 0.77. This is a neutral value indicating 1MRKX is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.77, 1MRKX is in line with its industry, outperforming 45.45% of the companies in the same 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
- A Current Ratio of 1.66 indicates that 1MRKX should not have too much problems paying its short term obligations.
- With a decent Current ratio value of 1.66, 1MRKX is doing good in 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.
- 1MRKX shows a small growth in Revenue. In the last year, the Revenue has grown by 1.68%.
- Measured over the past years, 1MRKX shows a quite strong growth in Revenue. The Revenue has been growing by 10.40% on average per year.
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.
- 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
- The Price/Earnings ratio is 11.92, which indicates a very decent valuation of 1MRKX.
- 81.82% of the companies in the same industry are more expensive than 1MRKX, based on the Price/Earnings ratio.
- 1MRKX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
- The Price/Forward Earnings ratio is 11.37, which indicates a very decent valuation of 1MRKX.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 78.18% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. 1MRKX is valued rather cheaply when compared to this.
| 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.
- Based on the Price/Free Cash Flow ratio, 1MRKX is valued a bit 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
- 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 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
- On average, the dividend of 1MRKX grows each year by 6.90%, which is quite nice.
Dividend Growth(5Y)6.9%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 1MRKX pays out 42.60% of its income as dividend. This is a bit on the high side, but may be sustainable.
- 1MRKX's earnings are growing slower than its dividend. 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%.