MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
111.01 USD
+2.75 (+2.54%)
110.8 USD
-0.21 (-0.19%)
Taking everything into account, MRK scores 7 out of 10 in our fundamental rating. MRK was compared to 190 industry peers in the Pharmaceuticals industry. While MRK has a great profitability rating, there are some minor concerns on its financial health. MRK may be a bit undervalued, certainly considering the very reasonable score on growth Finally MRK also has an excellent dividend rating. These ratings would make MRK suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year MRK was profitable.
- In the past year MRK had a positive cash flow from operations.
- MRK had positive earnings in each of the past 5 years.
- MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- MRK has a Return On Assets of 14.69%. This is amongst the best in the industry. MRK outperforms 94.74% of its industry peers.
- MRK has a better Return On Equity (36.71%) than 95.79% of its industry peers.
- With an excellent Return On Invested Capital value of 19.15%, MRK belongs to the best of the industry, outperforming 96.32% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for MRK is significantly above the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROIC | 19.15% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)20.39%
ROIC(5y)17.93%
1.3 Margins
- MRK has a Profit Margin of 29.63%. This is amongst the best in the industry. MRK outperforms 94.21% of its industry peers.
- MRK's Profit Margin has been stable in the last couple of years.
- With an excellent Operating Margin value of 38.08%, MRK belongs to the best of the industry, outperforming 96.32% of the companies in the same industry.
- MRK's Operating Margin has improved in the last couple of years.
- The Gross Margin of MRK (78.72%) is better than 83.68% 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 | 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 well above the Cost of Capital (WACC), so MRK is creating value.
- The number of shares outstanding for MRK remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, MRK has less shares outstanding
- The debt/assets ratio for MRK has been reduced compared to a year ago.
2.2 Solvency
- MRK has an Altman-Z score of 4.15. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
- MRK has a Altman-Z score of 4.15. This is in the better half of the industry: MRK outperforms 71.05% of its industry peers.
- MRK has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as MRK would need 3.17 years to pay back of all of its debts.
- MRK has a Debt to FCF ratio of 3.17. This is amongst the best in the industry. MRK outperforms 88.42% of its industry peers.
- MRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating MRK is somewhat dependend on debt financing.
- MRK has a worse Debt to Equity ratio (0.77) than 70.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.15 |
ROIC/WACC2.1
WACC9.12%
2.3 Liquidity
- MRK has a Current Ratio of 1.66. This is a normal value and indicates that MRK 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, MRK is doing worse than 68.42% of the companies in the same industry.
- MRK has a Quick Ratio of 1.44. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of MRK (1.44) is worse than 64.74% 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.
- The Revenue has been growing slightly by 1.68% in the past year.
- Measured over the past years, MRK 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
- MRK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.65% yearly.
- The Revenue is expected to grow by 2.64% on average over the next years.
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
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 12.60, the valuation of MRK can be described as correct.
- Based on the Price/Earnings ratio, MRK is valued cheaper than 87.89% of the companies in the same industry.
- When comparing the Price/Earnings ratio of MRK to the average of the S&P500 Index (27.30), we can say MRK is valued rather cheaply.
- A Price/Forward Earnings ratio of 12.02 indicates a correct valuation of MRK.
- MRK's Price/Forward Earnings ratio is rather cheap when compared to the industry. MRK is cheaper than 85.79% of the companies in the same industry.
- MRK is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.6 | ||
| Fwd PE | 12.02 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MRK is valued cheaper than 89.47% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, MRK is valued cheaper than 84.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.11 | ||
| EV/EBITDA | 10.05 |
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.
- The excellent profitability rating of MRK may justify a higher PE ratio.
PEG (NY)0.68
PEG (5Y)1.57
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
- MRK has a Yearly Dividend Yield of 3.06%. Purely for dividend investing, there may be better candidates out there.
- MRK's Dividend Yield is rather good when compared to the industry average which is at 0.35. MRK pays more dividend than 95.26% of the companies in the same industry.
- MRK's Dividend Yield is rather good when compared to the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
5.2 History
- The dividend of MRK is nicely growing with an annual growth rate of 6.90%!
- MRK has been paying a dividend for at least 10 years, so it has a reliable track record.
- MRK has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.9%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
- 42.60% of the earnings are spent on dividend by MRK. This is a bit on the high side, but may be sustainable.
- The dividend of MRK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP42.6%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
111.01
+2.75 (+2.54%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)10-30 2025-10-30/bmo
Earnings (Next)02-03 2026-02-03/amc
Inst Owners80.32%
Inst Owner Change-0.25%
Ins Owners0.05%
Ins Owner Change-0.55%
Market Cap275.53B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target110.37 (-0.58%)
Short Float %1.5%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
Yearly Dividend3.1
Dividend Growth(5Y)6.9%
DP42.6%
Div Incr Years14
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.37%
Min EPS beat(2)7.69%
Max EPS beat(2)13.06%
EPS beat(4)4
Avg EPS beat(4)7.28%
Min EPS beat(4)2.93%
Max EPS beat(4)13.06%
EPS beat(8)8
Avg EPS beat(8)21.72%
EPS beat(12)12
Avg EPS beat(12)16.45%
EPS beat(16)16
Avg EPS beat(16)15.36%
Revenue beat(2)1
Avg Revenue beat(2)-0.35%
Min Revenue beat(2)-1.54%
Max Revenue beat(2)0.83%
Revenue beat(4)2
Avg Revenue beat(4)-0.09%
Min Revenue beat(4)-1.54%
Max Revenue beat(4)0.83%
Revenue beat(8)5
Avg Revenue beat(8)0.41%
Revenue beat(12)9
Avg Revenue beat(12)1.14%
Revenue beat(16)13
Avg Revenue beat(16)1.98%
PT rev (1m)3.95%
PT rev (3m)8.74%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)-6.86%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.6 | ||
| Fwd PE | 12.02 | ||
| P/S | 4.29 | ||
| P/FCF | 21.11 | ||
| P/OCF | 16.15 | ||
| P/B | 5.31 | ||
| P/tB | 18.43 | ||
| EV/EBITDA | 10.05 |
EPS(TTM)8.81
EY7.94%
EPS(NY)9.24
Fwd EY8.32%
FCF(TTM)5.26
FCFY4.74%
OCF(TTM)6.88
OCFY6.19%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.68
PEG (5Y)1.57
Graham Number64.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROCE | 24.24% | ||
| ROIC | 19.15% | ||
| ROICexc | 23.36% | ||
| ROICexgc | 42.18% | ||
| OM | 38.08% | ||
| PM (TTM) | 29.63% | ||
| GM | 78.72% | ||
| FCFM | 20.31% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)20.39%
ROIC(5y)17.93%
ROICexc(3y)23.53%
ROICexc(5y)20.53%
ROICexgc(3y)51.05%
ROICexgc(5y)47.06%
ROCE(3y)25.81%
ROCE(5y)22.7%
ROICexgc growth 3Y7.57%
ROICexgc growth 5Y3.37%
ROICexc growth 3Y15.27%
ROICexc growth 5Y10.69%
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%
F-Score6
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Debt/EBITDA | 1.38 | ||
| Cap/Depr | 87.9% | ||
| Cap/Sales | 6.25% | ||
| Interest Coverage | 18.43 | ||
| Cash Conversion | 58.79% | ||
| Profit Quality | 68.56% | ||
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 | ||
| Altman-Z | 4.15 |
F-Score6
WACC9.12%
ROIC/WACC2.1
Cap/Depr(3y)95.66%
Cap/Depr(5y)110.48%
Cap/Sales(3y)6.36%
Cap/Sales(5y)7.78%
Profit Quality(3y)903.98%
Profit Quality(5y)573.68%
High Growth Momentum
Growth
EPS 1Y (TTM)48.07%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%70.7%
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue 1Y (TTM)1.68%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%3.72%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.64%
EBIT growth 1Y2.78%
EBIT growth 3Y15.93%
EBIT growth 5Y19.23%
EBIT Next Year28.15%
EBIT Next 3Y13.73%
EBIT Next 5Y11.96%
FCF growth 1Y-0.9%
FCF growth 3Y23.27%
FCF growth 5Y12.67%
OCF growth 1Y-0.73%
OCF growth 3Y15.02%
OCF growth 5Y9.82%
MERCK & CO. INC. / MRK FAQ
What is the fundamental rating for MRK stock?
ChartMill assigns a fundamental rating of 7 / 10 to MRK.
Can you provide the valuation status for MERCK & CO. INC.?
ChartMill assigns a valuation rating of 8 / 10 to MERCK & CO. INC. (MRK). This can be considered as Undervalued.
Can you provide the profitability details for MERCK & CO. INC.?
MERCK & CO. INC. (MRK) has a profitability rating of 9 / 10.
What is the financial health of MERCK & CO. INC. (MRK) stock?
The financial health rating of MERCK & CO. INC. (MRK) is 6 / 10.
How sustainable is the dividend of MERCK & CO. INC. (MRK) stock?
The dividend rating of MERCK & CO. INC. (MRK) is 7 / 10 and the dividend payout ratio is 42.6%.