MERCK & CO. INC. (6MK.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:6MK - US58933Y1055 - Common Stock
91.4 EUR
+1.6 (+1.78%)
We assign a fundamental rating of 6 out of 10 to 6MK. 6MK was compared to 55 industry peers in the Pharmaceuticals industry. While 6MK belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. 6MK is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year 6MK was profitable.
- In the past year 6MK had a positive cash flow from operations.
- 6MK had positive earnings in each of the past 5 years.
- 6MK 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 14.69%, 6MK belongs to the top of the industry, outperforming 89.09% of the companies in the same industry.
- 6MK has a Return On Equity of 36.71%. This is amongst the best in the industry. 6MK outperforms 90.91% of its industry peers.
- 6MK has a better Return On Invested Capital (12.83%) than 61.82% of its industry peers.
- 6MK had an Average Return On Invested Capital over the past 3 years of 13.67%. This 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
- 6MK's Profit Margin of 29.63% is amongst the best of the industry. 6MK outperforms 92.73% of its industry peers.
- In the last couple of years the Profit Margin of 6MK has remained more or less at the same level.
- Looking at the Operating Margin, with a value of 38.08%, 6MK belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
- 6MK's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 78.72%, 6MK belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
- In the last couple of years the Gross Margin of 6MK 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), 6MK is creating some value.
- 6MK has about the same amout of shares outstanding than it did 1 year ago.
- 6MK has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for 6MK has been reduced compared to a year ago.
2.2 Solvency
- 6MK has an Altman-Z score of 4.14. This indicates that 6MK is financially healthy and has little risk of bankruptcy at the moment.
- 6MK has a Altman-Z score (4.14) which is in line with its industry peers.
- The Debt to FCF ratio of 6MK is 3.17, which is a good value as it means it would take 6MK, 3.17 years of fcf income to pay off all of its debts.
- 6MK has a better Debt to FCF ratio (3.17) than 69.09% of its industry peers.
- 6MK has a Debt/Equity ratio of 0.77. This is a neutral value indicating 6MK is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.77, 6MK perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.14 |
ROIC/WACC1.46
WACC8.77%
2.3 Liquidity
- 6MK has a Current Ratio of 1.66. This is a normal value and indicates that 6MK is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of 6MK (1.66) is better than 69.09% of its industry peers.
- 6MK has a Quick Ratio of 1.44. This is a normal value and indicates that 6MK is financially healthy and should not expect problems in meeting its short term obligations.
- 6MK has a Quick ratio of 1.44. This is in the better half of the industry: 6MK outperforms 78.18% 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, 6MK 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, 6MK 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, 6MK will show a small growth in Earnings Per Share. The EPS will grow by 6.65% on average per year.
- Based on estimates for the next years, 6MK will show a small growth in Revenue. The Revenue will grow by 2.64% on average per year.
EPS Next Y18.51%
EPS Next 2Y-13.49%
EPS Next 3Y10.11%
EPS Next 5Y6.65%
Revenue Next Year1.23%
Revenue Next 2Y2.83%
Revenue Next 3Y3.72%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 12.42 indicates a correct valuation of 6MK.
- Based on the Price/Earnings ratio, 6MK is valued a bit cheaper than 78.18% of the companies in the same industry.
- 6MK is valuated cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 19.14, which indicates a rather expensive current valuation of 6MK.
- 6MK's Price/Forward Earnings is on the same level as the industry average.
- 6MK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.72.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.42 | ||
| Fwd PE | 19.14 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, 6MK is valued a bit cheaper than the industry average as 76.36% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of 6MK indicates a somewhat cheap valuation: 6MK is cheaper than 70.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.82 | ||
| EV/EBITDA | 9.99 |
4.3 Compensation for Growth
- 6MK'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 6MK may justify a higher PE ratio.
PEG (NY)0.67
PEG (5Y)1.54
EPS Next 2Y-13.49%
EPS Next 3Y10.11%
5. Dividend
5.1 Amount
- 6MK has a Yearly Dividend Yield of 3.11%. Purely for dividend investing, there may be better candidates out there.
- 6MK's Dividend Yield is rather good when compared to the industry average which is at 1.62. 6MK pays more dividend than 83.64% of the companies in the same industry.
- 6MK's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.11% |
5.2 History
- The dividend of 6MK is nicely growing with an annual growth rate of 6.90%!
Dividend Growth(5Y)6.9%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
- 42.60% of the earnings are spent on dividend by 6MK. This is a bit on the high side, but may be sustainable.
- The dividend of 6MK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP42.6%
EPS Next 2Y-13.49%
EPS Next 3Y10.11%
MERCK & CO. INC. / 6MK.DE FAQ
Can you provide the ChartMill fundamental rating for MERCK & CO. INC.?
ChartMill assigns a fundamental rating of 6 / 10 to 6MK.DE.
What is the valuation status for 6MK stock?
ChartMill assigns a valuation rating of 6 / 10 to MERCK & CO. INC. (6MK.DE). This can be considered as Fairly Valued.
What is the profitability of 6MK stock?
MERCK & CO. INC. (6MK.DE) has a profitability rating of 8 / 10.
What are the PE and PB ratios of MERCK & CO. INC. (6MK.DE) stock?
The Price/Earnings (PE) ratio for MERCK & CO. INC. (6MK.DE) is 12.42 and the Price/Book (PB) ratio is 5.24.
Is the dividend of MERCK & CO. INC. sustainable?
The dividend rating of MERCK & CO. INC. (6MK.DE) is 6 / 10 and the dividend payout ratio is 42.6%.