MERCK & CO. INC. (6MK.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:6MK - US58933Y1055 - Common Stock
91.6 EUR
-1.9 (-2.03%)
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
- 6MK had positive earnings in the past year.
- In the past year 6MK had a positive cash flow from operations.
- In the past 5 years 6MK has always been profitable.
- Each year in the past 5 years 6MK had a positive operating cash flow.
1.2 Ratios
- 6MK has a better Return On Assets (14.69%) than 87.27% of its industry peers.
- 6MK has a better Return On Equity (36.71%) than 89.09% of its industry peers.
- 6MK's Return On Invested Capital of 12.83% is fine compared to the rest of the industry. 6MK outperforms 61.82% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for 6MK 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.
- 6MK's Profit Margin has been stable in the last couple of years.
- 6MK has a better Operating Margin (38.08%) than 89.09% of its industry peers.
- 6MK's Operating Margin has improved in the last couple of years.
- 6MK's Gross Margin of 78.72% is amongst the best of the industry. 6MK outperforms 81.82% of its industry peers.
- 6MK'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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so 6MK is still 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.
- 6MK has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.14 indicates that 6MK is not in any danger for bankruptcy at the moment.
- 6MK's Altman-Z score of 4.14 is in line compared to the rest of the industry. 6MK outperforms 54.55% of its industry peers.
- 6MK has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as 6MK would need 3.17 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 3.17, 6MK is doing good in the industry, outperforming 69.09% of the companies in the same industry.
- A Debt/Equity ratio of 0.77 indicates that 6MK is somewhat dependend on debt financing.
- 6MK has a Debt to Equity ratio of 0.77. This is comparable to the rest of the industry: 6MK outperforms 47.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.14 |
ROIC/WACC1.47
WACC8.73%
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.
- Looking at the Current ratio, with a value of 1.66, 6MK is in the better half of the industry, outperforming 67.27% of the companies in the same industry.
- A Quick Ratio of 1.44 indicates that 6MK should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.44, 6MK is in the better half of the industry, outperforming 76.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
- 6MK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 48.07%, which is quite impressive.
- 6MK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.04% yearly.
- 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
- 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 Y18.51%
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.
- 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
- Based on the Price/Earnings ratio of 12.21, the valuation of 6MK can be described as correct.
- Based on the Price/Earnings ratio, 6MK is valued a bit cheaper than the industry average as 78.18% of the companies are valued more expensively.
- 6MK's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- With a Price/Forward Earnings ratio of 18.81, 6MK is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 6MK is on the same level as its industry peers.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. 6MK is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.21 | ||
| Fwd PE | 18.81 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, 6MK is valued a bit cheaper than 76.36% of the companies in the same industry.
- 69.09% of the companies in the same industry are more expensive than 6MK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.46 | ||
| EV/EBITDA | 9.99 |
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.
- 6MK has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.66
PEG (5Y)1.52
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.
- Compared to an average S&P500 Dividend Yield of 1.81, 6MK pays a better dividend.
| 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.
- 6MK's earnings are growing slower than its dividend. 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 12.21 and the Price/Book (PB) ratio is 5.15.
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%.