MERCK KGAA (MRK.DE) Stock Fundamental Analysis
FRA:MRK - Deutsche Boerse Ag - DE0006599905 - Common Stock - Currency: EUR
Taking everything into account, MRK scores 4 out of 10 in our fundamental rating. MRK was compared to 50 industry peers in the Pharmaceuticals industry. MRK has an average financial health and profitability rating. MRK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
MRK had positive earnings in the past year.
In the past year MRK had a positive cash flow from operations.
Each year in the past 5 years MRK has been profitable.
Each year in the past 5 years MRK had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MRK (5.38%) is comparable to the rest of the industry.
MRK's Return On Equity of 9.28% is in line compared to the rest of the industry. MRK outperforms 58.00% of its industry peers.
MRK's Return On Invested Capital of 7.26% is in line compared to the rest of the industry. MRK outperforms 54.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MRK is significantly below the industry average of 14.89%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.28% | ||
| ROIC | 7.26% |
ROA(3y)6.02%
ROA(5y)5.91%
ROE(3y)10.9%
ROE(5y)11.75%
ROIC(3y)9.28%
ROIC(5y)9.07%
1.3 Margins
Looking at the Profit Margin, with a value of 13.12%, MRK is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
MRK's Profit Margin has improved in the last couple of years.
MRK has a Operating Margin of 17.26%. This is comparable to the rest of the industry: MRK outperforms 52.00% of its industry peers.
In the last couple of years the Operating Margin of MRK has grown nicely.
The Gross Margin of MRK (59.01%) is worse than 66.00% of its industry peers.
MRK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.26% | ||
| PM (TTM) | 13.12% | ||
| GM | 59.01% |
OM growth 3Y-2.38%
OM growth 5Y5.83%
PM growth 3Y-5.43%
PM growth 5Y9.94%
GM growth 3Y-1.81%
GM growth 5Y-1.2%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MRK is creating some value.
Compared to 1 year ago, MRK has about the same amount of shares outstanding.
The number of shares outstanding for MRK remains at a similar level compared to 5 years ago.
MRK has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.93 indicates that MRK is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of MRK (2.93) is comparable to the rest of the industry.
MRK has a debt to FCF ratio of 4.28. This is a neutral value as MRK would need 4.28 years to pay back of all of its debts.
With a Debt to FCF ratio value of 4.28, MRK perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that MRK is not too dependend on debt financing.
MRK has a Debt to Equity ratio of 0.23. This is in the better half of the industry: MRK outperforms 66.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4.28 | ||
| Altman-Z | 2.93 |
ROIC/WACC1.06
WACC6.84%
2.3 Liquidity
MRK has a Current Ratio of 1.19. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
MRK has a worse Current ratio (1.19) than 62.00% of its industry peers.
MRK has a Quick Ratio of 1.19. This is a bad value and indicates that MRK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of MRK (0.79) is worse than 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
MRK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.77%.
MRK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.19% yearly.
MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 0.78%.
MRK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.55% yearly.
EPS 1Y (TTM)1.77%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%11.89%
Revenue 1Y (TTM)0.78%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.7%
3.2 Future
MRK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.50% yearly.
Based on estimates for the next years, MRK will show a small growth in Revenue. The Revenue will grow by 4.14% on average per year.
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y7.5%
Revenue Next Year4.79%
Revenue Next 2Y4.52%
Revenue Next 3Y4.07%
Revenue Next 5Y4.14%
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.
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
A Price/Earnings ratio of 14.04 indicates a correct valuation of MRK.
Based on the Price/Earnings ratio, MRK is valued a bit cheaper than 70.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.79, MRK is valued rather cheaply.
The Price/Forward Earnings ratio is 12.96, which indicates a correct valuation of MRK.
Based on the Price/Forward Earnings ratio, MRK is valued a bit cheaper than the industry average as 68.00% of the companies are valued more expensively.
MRK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.38, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.04 | ||
| Fwd PE | 12.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MRK is on the same level as its industry peers.
MRK's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 10.12 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.68
PEG (5Y)1.53
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
MRK has a Yearly Dividend Yield of 1.89%.
MRK's Dividend Yield is comparable with the industry average which is at 3.15.
MRK's Dividend Yield is slightly below the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
5.2 History
The dividend of MRK is nicely growing with an annual growth rate of 11.88%!
Dividend Growth(5Y)11.88%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
10.23% of the earnings are spent on dividend by MRK. This is a low number and sustainable payout ratio.
MRK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.23%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
FRA:MRK (4/25/2025, 7:00:00 PM)
121.15
+1.4 (+1.17%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners54.58%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap52.67B
Analysts80.83
Price Target181.98 (50.21%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
Yearly Dividend0.65
Dividend Growth(5Y)11.88%
DP10.23%
Div Incr Years2
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.48%
Min EPS beat(2)-2.56%
Max EPS beat(2)-0.39%
EPS beat(4)2
Avg EPS beat(4)4.19%
Min EPS beat(4)-2.56%
Max EPS beat(4)10.63%
EPS beat(8)3
Avg EPS beat(8)1.62%
EPS beat(12)6
Avg EPS beat(12)0.89%
EPS beat(16)8
Avg EPS beat(16)2.24%
Revenue beat(2)0
Avg Revenue beat(2)-1.39%
Min Revenue beat(2)-2.1%
Max Revenue beat(2)-0.68%
Revenue beat(4)1
Avg Revenue beat(4)-0.88%
Min Revenue beat(4)-2.1%
Max Revenue beat(4)0.28%
Revenue beat(8)1
Avg Revenue beat(8)-1.3%
Revenue beat(12)3
Avg Revenue beat(12)-0.96%
Revenue beat(16)5
Avg Revenue beat(16)-0.72%
PT rev (1m)-2.13%
PT rev (3m)-3.38%
EPS NQ rev (1m)-0.77%
EPS NQ rev (3m)-1.67%
EPS NY rev (1m)-3.43%
EPS NY rev (3m)-5.48%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)0.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.04 | ||
| Fwd PE | 12.96 | ||
| P/S | 2.49 | ||
| P/FCF | 21.93 | ||
| P/OCF | 11.49 | ||
| P/B | 1.76 | ||
| P/tB | 11.76 | ||
| EV/EBITDA | 10.12 |
EPS(TTM)8.63
EY7.12%
EPS(NY)9.35
Fwd EY7.72%
FCF(TTM)5.52
FCFY4.56%
OCF(TTM)10.55
OCFY8.71%
SpS48.66
BVpS68.8
TBVpS10.3
PEG (NY)1.68
PEG (5Y)1.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.28% | ||
| ROCE | 9.07% | ||
| ROIC | 7.26% | ||
| ROICexc | 7.88% | ||
| ROICexgc | 25.03% | ||
| OM | 17.26% | ||
| PM (TTM) | 13.12% | ||
| GM | 59.01% | ||
| FCFM | 11.35% |
ROA(3y)6.02%
ROA(5y)5.91%
ROE(3y)10.9%
ROE(5y)11.75%
ROIC(3y)9.28%
ROIC(5y)9.07%
ROICexc(3y)9.79%
ROICexc(5y)9.49%
ROICexgc(3y)29.91%
ROICexgc(5y)31.66%
ROCE(3y)11.59%
ROCE(5y)11.34%
ROICexcg growth 3Y-8.23%
ROICexcg growth 5Y-5.36%
ROICexc growth 3Y-3.27%
ROICexc growth 5Y7.94%
OM growth 3Y-2.38%
OM growth 5Y5.83%
PM growth 3Y-5.43%
PM growth 5Y9.94%
GM growth 3Y-1.81%
GM growth 5Y-1.2%
F-Score4
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4.28 | ||
| Debt/EBITDA | 1.21 | ||
| Cap/Depr | 102.34% | ||
| Cap/Sales | 10.32% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.26% | ||
| Profit Quality | 86.53% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 2.93 |
F-Score4
WACC6.84%
ROIC/WACC1.06
Cap/Depr(3y)99.64%
Cap/Depr(5y)92.04%
Cap/Sales(3y)9.36%
Cap/Sales(5y)8.84%
Profit Quality(3y)74.2%
Profit Quality(5y)84.7%
High Growth Momentum
Growth
EPS 1Y (TTM)1.77%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%11.89%
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y7.5%
Revenue 1Y (TTM)0.78%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.7%
Revenue Next Year4.79%
Revenue Next 2Y4.52%
Revenue Next 3Y4.07%
Revenue Next 5Y4.14%
EBIT growth 1Y-0.19%
EBIT growth 3Y-0.01%
EBIT growth 5Y11.7%
EBIT Next Year44.88%
EBIT Next 3Y17.71%
EBIT Next 5Y12.45%
FCF growth 1Y36.4%
FCF growth 3Y-9.07%
FCF growth 5Y5.53%
OCF growth 1Y21.19%
OCF growth 3Y-0.22%
OCF growth 5Y9.93%