MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1MRKX - US58933Y1055 - Common Stock
90.3 EUR
-0.1 (-0.11%)
Taking everything into account, 1MRKX scores 7 out of 10 in our fundamental rating. 1MRKX was compared to 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on 1MRKX. 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 better Return On Assets (14.69%) than 89.09% of its industry peers.
- 1MRKX has a Return On Equity of 36.71%. This is amongst the best in 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
- 1MRKX has a better Profit Margin (29.63%) than 92.73% of its industry peers.
- 1MRKX's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 38.08%, 1MRKX belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
- In the last couple of years the Operating Margin of 1MRKX has grown nicely.
- The Gross Margin of 1MRKX (78.72%) is better 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
- 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 remains at a similar level compared to 1 year ago.
- 1MRKX has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, 1MRKX has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 4.09 indicates that 1MRKX is not in any danger for bankruptcy at the moment.
- 1MRKX's Altman-Z score of 4.09 is in line compared 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.
- 1MRKX has a Debt to Equity ratio (0.77) which is in line with 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.
- 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's Quick ratio of 1.44 is fine compared to the rest of the industry. 1MRKX outperforms 74.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
- 1MRKX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 48.07%, which is quite impressive.
- 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.
- The Revenue has been growing slightly by 1.68% in the past 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
- 1MRKX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.65% yearly.
- Based on estimates for the next years, 1MRKX will show a small growth in Revenue. The Revenue will grow by 2.64% on average per year.
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
- 1MRKX is valuated reasonably with a Price/Earnings ratio of 11.93.
- 1MRKX's Price/Earnings ratio is rather cheap when compared to the industry. 1MRKX is cheaper than 81.82% of the companies in the same industry.
- 1MRKX is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 11.38 indicates a reasonable valuation of 1MRKX.
- Based on the Price/Forward Earnings ratio, 1MRKX is valued a bit cheaper than the industry average as 78.18% of the companies are valued more expensively.
- 1MRKX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.93 | ||
| Fwd PE | 11.38 |
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.
- 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 | 20 | ||
| 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.
- 1MRKX's Dividend Yield is a higher than the industry average which is at 1.62.
- 1MRKX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| 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 11.93 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%.