MERCK KGAA (MRK.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:MRK - DE0006599905 - Common Stock
127.7 EUR
-0.7 (-0.55%)
MRK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 55 industry peers in the Pharmaceuticals industry. MRK has only an average score on both its financial health and profitability. MRK is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year MRK was profitable.
- MRK had a positive operating cash flow in the past year.
- In the past 5 years MRK has always been profitable.
- Each year in the past 5 years MRK had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.80%, MRK is in line with its industry, outperforming 50.00% of the companies in the same industry.
- MRK has a Return On Equity (10.21%) which is comparable to the rest of the industry.
- Looking at the Return On Invested Capital, with a value of 7.46%, MRK is in line with its industry, outperforming 46.30% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for MRK is below the industry average of 13.93%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.8% | ||
| ROE | 10.21% | ||
| ROIC | 7.46% |
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 13.89%, MRK is in line with its industry, outperforming 55.56% of the companies in the same industry.
- In the last couple of years the Profit Margin of MRK has grown nicely.
- MRK has a Operating Margin (18.53%) which is in line with its industry peers.
- MRK's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 58.69%, MRK is doing worse than 66.67% of the companies in the same industry.
- In the last couple of years the Gross Margin of MRK has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.53% | ||
| PM (TTM) | 13.89% | ||
| GM | 58.69% |
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
- MRK has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- MRK has about the same amout of shares outstanding than it did 1 year ago.
- MRK has about the same amout of shares outstanding than it did 5 years ago.
- Compared to 1 year ago, MRK has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.97 indicates that MRK is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of MRK (2.97) is comparable to the rest of the industry.
- MRK has a debt to FCF ratio of 6.26. This is a slightly negative value and a sign of low solvency as MRK would need 6.26 years to pay back of all of its debts.
- MRK has a Debt to FCF ratio (6.26) which is in line with its industry peers.
- A Debt/Equity ratio of 0.36 indicates that MRK is not too dependend on debt financing.
- MRK's Debt to Equity ratio of 0.36 is fine compared to the rest of the industry. MRK outperforms 64.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | 6.26 | ||
| Altman-Z | 2.97 |
ROIC/WACC1.07
WACC7%
2.3 Liquidity
- MRK has a Current Ratio of 1.49. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.49, MRK perfoms like the industry average, outperforming 59.26% of the companies in the same industry.
- MRK has a Quick Ratio of 1.49. This is a bad value and indicates that MRK is not financially healthy enough and could expect problems in meeting its short term obligations.
- MRK has a Quick ratio (0.97) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
- MRK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.43%.
- The Earnings Per Share has been growing by 9.19% on average over the past years. This is quite good.
- MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 1.47%.
- The Revenue has been growing slightly by 5.55% on average over the past years.
EPS 1Y (TTM)1.43%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%0.87%
Revenue 1Y (TTM)1.47%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%0.99%
3.2 Future
- MRK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.00% yearly.
- The Revenue is expected to grow by 3.01% on average over the next years.
EPS Next Y-1.47%
EPS Next 2Y-0.29%
EPS Next 3Y1.74%
EPS Next 5Y5%
Revenue Next Year0.36%
Revenue Next 2Y1.05%
Revenue Next 3Y2.06%
Revenue Next 5Y3.01%
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 decreasing.
- 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 14.97 indicates a correct valuation of MRK.
- Based on the Price/Earnings ratio, MRK is valued a bit cheaper than 72.22% of the companies in the same industry.
- MRK's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 14.88 indicates a correct valuation of MRK.
- MRK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MRK is cheaper than 68.52% of the companies in the same industry.
- MRK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.97 | ||
| Fwd PE | 14.88 |
4.2 Price Multiples
- 66.67% of the companies in the same industry are more expensive than MRK, based on the Enterprise Value to EBITDA ratio.
- The rest of the industry has a similar Price/Free Cash Flow ratio as MRK.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.72 | ||
| EV/EBITDA | 10.94 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.63
EPS Next 2Y-0.29%
EPS Next 3Y1.74%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.71%, MRK has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.61, MRK pays a bit more dividend than its industry peers.
- MRK's Dividend Yield is comparable with the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.71% |
5.2 History
- On average, the dividend of MRK grows each year by 11.88%, which is quite nice.
Dividend Growth(5Y)11.88%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
- 9.61% of the earnings are spent on dividend by MRK. This is a low number and sustainable payout ratio.
- The dividend of MRK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP9.61%
EPS Next 2Y-0.29%
EPS Next 3Y1.74%
MERCK KGAA / MRK.DE FAQ
What is the fundamental rating for MRK stock?
ChartMill assigns a fundamental rating of 4 / 10 to MRK.DE.
Can you provide the valuation status for MERCK KGAA?
ChartMill assigns a valuation rating of 4 / 10 to MERCK KGAA (MRK.DE). This can be considered as Fairly Valued.
Can you provide the profitability details for MERCK KGAA?
MERCK KGAA (MRK.DE) has a profitability rating of 5 / 10.
What is the financial health of MERCK KGAA (MRK.DE) stock?
The financial health rating of MERCK KGAA (MRK.DE) is 4 / 10.
How sustainable is the dividend of MERCK KGAA (MRK.DE) stock?
The dividend rating of MERCK KGAA (MRK.DE) is 5 / 10 and the dividend payout ratio is 9.61%.