MERCK & CO. INC. (6MK.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:6MK - US58933Y1055 - Common Stock
91.3 EUR
+1.5 (+1.67%)
Taking everything into account, 6MK scores 6 out of 10 in our fundamental rating. 6MK was compared to 55 industry peers in the Pharmaceuticals industry. 6MK has an excellent profitability rating, but there are some minor concerns on its financial health. 6MK has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- 6MK had positive earnings in the past year.
- 6MK had a positive operating cash flow in the past year.
- 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
- 6MK's Return On Assets of 14.69% is amongst the best of the industry. 6MK outperforms 89.09% of its industry peers.
- 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.
- Looking at the Return On Invested Capital, with a value of 12.83%, 6MK is in the better half of the industry, outperforming 61.82% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years 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.
- In the last couple of years the Profit Margin of 6MK has remained more or less at the same level.
- 6MK has a better Operating Margin (38.08%) than 90.91% of its industry peers.
- 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.
- Compared to 1 year ago, 6MK has about the same amount of shares outstanding.
- The number of shares outstanding for 6MK has been reduced compared to 5 years ago.
- 6MK has a better debt/assets ratio than last year.
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 comparable to the rest of the industry.
- 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.
- 6MK has a better Debt to FCF ratio (3.17) than 69.09% of its industry peers.
- A Debt/Equity ratio of 0.77 indicates that 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/WACC1.47
WACC8.71%
2.3 Liquidity
- A Current Ratio of 1.66 indicates that 6MK should not have too much problems paying its short term obligations.
- The Current ratio of 6MK (1.66) is better than 69.09% of its industry peers.
- A Quick Ratio of 1.44 indicates that 6MK should not have too much problems paying its short term obligations.
- 6MK has a better Quick ratio (1.44) than 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.
- 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, 6MK shows a small growth in Revenue. The Revenue has grown by 1.68% in the last year.
- Measured over the past years, 6MK 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
- 6MK 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, 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
- 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.
- 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
- Based on the Price/Earnings ratio of 12.40, the valuation of 6MK can be described as correct.
- Compared to the rest of the industry, the Price/Earnings ratio of 6MK indicates a somewhat cheap valuation: 6MK is cheaper than 78.18% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, 6MK is valued rather cheaply.
- The Price/Forward Earnings ratio is 19.12, which indicates a rather expensive current valuation of 6MK.
- The rest of the industry has a similar Price/Forward Earnings ratio as 6MK.
- 6MK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.4 | ||
| Fwd PE | 19.12 |
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.
- 6MK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 6MK is cheaper than 70.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.79 | ||
| 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.
- 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%.
- Compared to an average industry Dividend Yield of 1.62, 6MK pays a better dividend. On top of this 6MK pays more dividend than 83.64% of the companies listed 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
- On average, the dividend of 6MK grows each year by 6.90%, which is quite nice.
Dividend Growth(5Y)6.9%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
- 6MK pays out 42.60% of its income as dividend. 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 12.4 and the Price/Book (PB) ratio is 5.23.
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%.