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 52 industry peers in the Pharmaceuticals industry. MRK has only an average score on both its financial health and profitability. MRK has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
MRK had positive earnings in the past year.
MRK had a positive operating cash flow in the past year.
Of the past 5 years MRK 4 years were profitable.
MRK had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
MRK has a Return On Assets (5.38%) which is in line with its industry peers.
The Return On Equity of MRK (9.52%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 6.93%, MRK is in line with its industry, outperforming 48.08% of the companies in the same industry.
MRK had an Average Return On Invested Capital over the past 3 years of 9.71%. This is below the industry average of 13.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.52% | ||
| ROIC | 6.93% |
ROA(3y)6.47%
ROA(5y)5.44%
ROE(3y)12.58%
ROE(5y)11.37%
ROIC(3y)9.71%
ROIC(5y)8.56%
1.3 Margins
Looking at the Profit Margin, with a value of 12.86%, MRK is in the better half of the industry, outperforming 63.46% of the companies in the same industry.
In the last couple of years the Profit Margin of MRK has declined.
MRK's Operating Margin of 16.47% is in line compared to the rest of the industry. MRK outperforms 51.92% of its industry peers.
MRK's Operating Margin has improved in the last couple of years.
MRK's Gross Margin of 58.60% is on the low side compared to the rest of the industry. MRK is outperformed by 67.31% of its industry peers.
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 | 16.47% | ||
| PM (TTM) | 12.86% | ||
| GM | 58.6% |
OM growth 3Y4.73%
OM growth 5Y6.99%
PM growth 3Y5.88%
PM growth 5Y-9.97%
GM growth 3Y-0.65%
GM growth 5Y-1.24%
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.
MRK has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 3.12 indicates that MRK is not in any danger for bankruptcy at the moment.
With a Altman-Z score value of 3.12, MRK perfoms like the industry average, outperforming 59.62% of the companies in the same industry.
The Debt to FCF ratio of MRK is 5.29, which is a neutral value as it means it would take MRK, 5.29 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.29, MRK perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
MRK has a Debt/Equity ratio of 0.28. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.28, MRK is in the better half of the industry, outperforming 63.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 5.29 | ||
| Altman-Z | 3.12 |
ROIC/WACC1.04
WACC6.66%
2.3 Liquidity
A Current Ratio of 1.33 indicates that MRK should not have too much problems paying its short term obligations.
MRK has a Current ratio of 1.33. This is comparable to the rest of the industry: MRK outperforms 40.38% of its industry peers.
A Quick Ratio of 0.91 indicates that MRK may have some problems paying its short term obligations.
MRK has a Quick ratio (0.91) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
The earnings per share for MRK have decreased strongly by -16.74% in the last year.
Measured over the past 5 years, MRK shows a small growth in Earnings Per Share. The EPS has been growing by 4.89% on average per year.
EPS 1Y (TTM)-16.74%
EPS 3Y-6.8%
EPS 5Y4.89%
EPS Q2Q%-72.95%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%2.51%
3.2 Future
The Earnings Per Share is expected to grow by 13.01% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.19% on average over the next years.
EPS Next Y37.14%
EPS Next 2Y21.73%
EPS Next 3Y15.88%
EPS Next 5Y13.01%
Revenue Next Year4.79%
Revenue Next 2Y4.52%
Revenue Next 3Y4.07%
Revenue Next 5Y4.19%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.19, the valuation of MRK can be described as rather expensive.
The rest of the industry has a similar Price/Earnings ratio as MRK.
MRK is valuated rather cheaply when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.99, which indicates a correct valuation of MRK.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MRK indicates a somewhat cheap valuation: MRK is cheaper than 63.46% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. MRK is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 13.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRK is valued a bit cheaper than 63.46% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MRK is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.4 | ||
| EV/EBITDA | 11.86 |
4.3 Compensation for Growth
MRK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MRK's earnings are expected to grow with 15.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.52
PEG (5Y)3.92
EPS Next 2Y21.73%
EPS Next 3Y15.88%
5. Dividend
5.1 Amount
MRK has a Yearly Dividend Yield of 1.56%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.86, MRK has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.33, MRK is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.56% |
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
10.53% of the earnings are spent on dividend by MRK. This is a low number and sustainable payout ratio.
The dividend of MRK is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP10.53%
EPS Next 2Y21.73%
EPS Next 3Y15.88%
FRA:MRK (3/7/2025, 7:00:00 PM)
135.5
-5.8 (-4.1%)
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 Cap58.91B
Analysts80.83
Price Target185.94 (37.23%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.56% |
Yearly Dividend0.65
Dividend Growth(5Y)11.88%
DP10.53%
Div Incr Years2
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.12%
Min EPS beat(2)-0.39%
Max EPS beat(2)10.63%
EPS beat(4)2
Avg EPS beat(4)3.77%
Min EPS beat(4)-4.23%
Max EPS beat(4)10.63%
EPS beat(8)3
Avg EPS beat(8)1.14%
EPS beat(12)6
Avg EPS beat(12)0.8%
EPS beat(16)8
Avg EPS beat(16)2.32%
Revenue beat(2)1
Avg Revenue beat(2)-0.91%
Min Revenue beat(2)-2.1%
Max Revenue beat(2)0.28%
Revenue beat(4)1
Avg Revenue beat(4)-1.24%
Min Revenue beat(4)-2.14%
Max Revenue beat(4)0.28%
Revenue beat(8)1
Avg Revenue beat(8)-1.45%
Revenue beat(12)3
Avg Revenue beat(12)-0.92%
Revenue beat(16)6
Avg Revenue beat(16)-0.63%
PT rev (1m)-0.93%
PT rev (3m)-1.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.81%
EPS NY rev (1m)-0.47%
EPS NY rev (3m)-0.35%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)-0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 13.99 | ||
| P/S | 2.81 | ||
| P/FCF | 27.4 | ||
| P/OCF | 13.36 | ||
| P/B | 2.08 | ||
| P/tB | 13.43 | ||
| EV/EBITDA | 11.86 |
EPS(TTM)7.06
EY5.21%
EPS(NY)9.68
Fwd EY7.15%
FCF(TTM)4.95
FCFY3.65%
OCF(TTM)10.14
OCFY7.48%
SpS48.22
BVpS65.14
TBVpS10.09
PEG (NY)0.52
PEG (5Y)3.92
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.52% | ||
| ROCE | 8.7% | ||
| ROIC | 6.93% | ||
| ROICexc | 7.67% | ||
| ROICexgc | 23.14% | ||
| OM | 16.47% | ||
| PM (TTM) | 12.86% | ||
| GM | 58.6% | ||
| FCFM | 10.26% |
ROA(3y)6.47%
ROA(5y)5.44%
ROE(3y)12.58%
ROE(5y)11.37%
ROIC(3y)9.71%
ROIC(5y)8.56%
ROICexc(3y)10.1%
ROICexc(5y)8.88%
ROICexgc(3y)32.67%
ROICexgc(5y)33.37%
ROCE(3y)12.19%
ROCE(5y)10.77%
ROICexcg growth 3Y-6.72%
ROICexcg growth 5Y-4.82%
ROICexc growth 3Y4.67%
ROICexc growth 5Y6.64%
OM growth 3Y4.73%
OM growth 5Y6.99%
PM growth 3Y5.88%
PM growth 5Y-9.97%
GM growth 3Y-0.65%
GM growth 5Y-1.24%
F-Score4
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 5.29 | ||
| Debt/EBITDA | 1.42 | ||
| Cap/Depr | 108.04% | ||
| Cap/Sales | 10.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.52% | ||
| Profit Quality | 79.75% | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 3.12 |
F-Score4
WACC6.66%
ROIC/WACC1.04
Cap/Depr(3y)92.41%
Cap/Depr(5y)82.08%
Cap/Sales(3y)8.33%
Cap/Sales(5y)8.04%
Profit Quality(3y)80.23%
Profit Quality(5y)95.21%
High Growth Momentum
Growth
EPS 1Y (TTM)-16.74%
EPS 3Y-6.8%
EPS 5Y4.89%
EPS Q2Q%-72.95%
EPS Next Y37.14%
EPS Next 2Y21.73%
EPS Next 3Y15.88%
EPS Next 5Y13.01%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%2.51%
Revenue Next Year4.79%
Revenue Next 2Y4.52%
Revenue Next 3Y4.07%
Revenue Next 5Y4.19%
EBIT growth 1Y-11.8%
EBIT growth 3Y11.21%
EBIT growth 5Y14.69%
EBIT Next Year41.6%
EBIT Next 3Y18.19%
EBIT Next 5Y13.12%
FCF growth 1Y-21.79%
FCF growth 3Y-2.74%
FCF growth 5Y7.92%
OCF growth 1Y2.77%
OCF growth 3Y2.86%
OCF growth 5Y11.27%